Broader the Picture, Better The Outlook

Published by Sharekhan Education | September 27, 2022

Micky R Gala | Sharekhan Education 

Broader the Picture, Better The Outlook

Having an aerial view always gives us valuable information, which helps us to make better decisions in all aspects of life. According to Angela Abraham, ‘The aerial view of a land invites new ideas, new philosophical wonderings’’. It is not much different regard to the complexities of the trade. In trading too, big time frames give traders a better view of the overall markets.

A monthly chart can give a trader a broader picture of that particular stock which can help the trader make a better decision with full conviction. It works well for conservative traders.

Trading with a higher time frame

Over here, I am going to discuss the monthly income trade as one of the best ways to get better clarity of the chart. Many traders don’t make money as they go for a 30-15-5-minutes chart which doesn’t give the perfect picture. It gives money, which I am not denying, but a smaller time frame consumes a lot of time and energy due to its high volatility, which can disturb you psychologically too. The bigger time frame shows the trend of the stock in a much better way compared to the smaller time frame.

Benefits of trading in higher time frames

• As trend traders, we generally hate sideways trends as they block our money plus increase our mental pressure. On the other hand, we can view the possibility of the trend formation in a bigger aspect and can plan our trades looking at the overall direction, which is harder to do in smaller time frames.
• Higher time frames assist us to stabilize our emotions, which is very important in trading. We can keep our emotions at bay which always impact us, especially in smaller time frames due to high and fast volatile movement. Stability in emotions can show you the right direction to move according to the current scenario of the market with proper analysis.
• Small news which comes in the market can impact a lot in smaller time frames due to which we can get stuck, but if we go for a higher time frame, it can save us from such things and show us a better path to move on. By looking at the bigger time frame, we can see that the chart is just experiencing a small movement that won’t have an impact for a long time.
• Trading on a bigger chart gives better rewards compared to a smaller time frame. Trading in a smaller time frame restricts the profit due to time restrictions (intra-day traders), which you can achieve by trading in a bigger time frame. The risk and reward can be 3 times if we compare to a smaller time frame. It’s like compounding the money.

To conclude

No doubt, higher time frames work well, but without a proper plan along with the demand/supply core strategy, there is more advantage for higher rewards. Demand/Supply gives you better trades with a high probability of the price turning in your favor, but for that, you require proper education.

To know more about such trading concepts, enroll for our Free Power Money Workshop. 

By Enrolling yourself in this stock market course, a learner can learn the basics and the various aspects of trading in Futures and Options Trading.