Trends is valid only the time frame they occur. Chart patterns in time frames larger and smaller than the current trend are independent. This inter-relationship applies all the way from 1-minute through yearly chart analysis.
That’s why traders must always operate within various time frames. The most profitable positions will align to support and resistance on the chart one amplitude above the trade and display low risk entry points on the chart one amplitude below.
Price evolves through bull and bear conflicts in all time frames. When ongoing trends are not in gear with specific charting periods, trade preparation may become subjective and dangerous.
The perfect opportunity to enter a trade rarely exists. An obvious breakout on one chart may face resistance on the longer-term view just above a planned entry level. Or a shorter-term chart may display so much volatility that any entry becomes a dangerous enterprise.
Successful trading needs a careful analysis of conflicting information for entering a trade only when favorable odds rise to an acceptable level. If you face with a good setup in one time frame but marginal conditions for those surrounding it, use your experiences and skills to evaluate the overall risk. If risk/reward ratio is in a tolerable range, consider execution even if all factors do not favor success.
However, chart information priority parallel chart length. For example, major highs and lows on the weekly chart carry greater importance than those on the 1-hour chart.
Profit opportunity aligns to specific time frames. This trend relativity error often forces a new position just as the short-term swing turns sharply against the entry. Trend relativity errors rob profits on good entries as well. No one wants to leave money on the table. Natural wave motion may whipsaw the position sharply and sends the trade into a substantial loss well before reaching a reward target.
Most traders should never change their holding period without detailed pre-planning. Specific time frames require unique skills that each trader must master with experience.
Begin with a sharp focus on the next direct move within a predetermined time frame. Prepare a written trading plan that states how long the position will be held and stick with it. Establish a profit target for each promising setup and then reevaluate the landscape that price must cross to get there. Consider the pure time element of the trade. Decide how many bars must pass before a trade will be abandoned, regardless of gain or loss.