Price Motion And Time Frame

Just like the many variations in a stock pickers picks, many times charts can be telling you the same thing differently. There is a common thread among all charts of the same equity that creates a semblance of these differences; time. For the trader, chartist or stock picker when analysis doesn’t follow through it can often be because of confusion in the trading time frame.

Most investors go through fazes of interest and disinterest in listening to the financial pundits, stock pickers and floor traders for a jump on market momentums. Yet most successful traders know a successful trade is determined by an understanding of their actions relative to a trading time frame not a trading opinion or tip. These opinions are only relative to a very independent time frame, perhaps called a “debatable time frame”. A period in itself which is based on factors removed from price motion and timing a trade, where the actual price of an equity is up for debate in a very unrealistic fashion. A price does not wait for debate, it only waits for time and time will not stop unless the market is closed. Most often the winners and a losers of a debate have little to win or loose. Very unlike a trader. A traders time frame must be relative to price motion and price motion alone.

A successful trader can be confused by their trading time frame even if they are diligent to determine what that is before they place a trade. This is most often the case when they may be resolved that the chart is right, but their time frame was not. Possibly because of opinion or doubt of something irrelevant to time frame and price motion, they will exit or enter the trade at an inappropriate time disconnected to the expected result. If a trader is refining his technical analysis they must always resolve issues of trading time frames. Often the analysis for price targets is not being used relative to a single time frame, but being interchanged within multiple time frames. When a larger time frame takes precedence of price motion it can catch a trader off guard.

Specific to Elliott Wave trading and the trading techniques discussed at ssttrader is a key aspect to the structure of wave counts and price motion timing. It is a big picture rule using these theories that every wave 5 peak is in fact a wave 3 of a parent wave and larger time frame.

If a trader using Elliott Wave Theory can grasp that their time frame is key to their price targets, a seemingly easy concept to master, then projecting price motion becomes less complex. Certainty will become more and more relevant to your personal technical analysis than opinions or projections heard elsewhere. Without awareness of a trading time frame, price motion relative to time frame can be easily lost.