Every profit opportunity arrives with a time shadow hanging over it. Learn to focus attention on important feedback at the exact time that the information will likely impact that market. It may flag an execution window that closes in minutes or offer an exit that should be taken without question when it arrives. Recognize the impact of time on reward:risk before position entry and update conclusions as each new price bar prints.
Align trade signals through a multi-dimensional time view. Choose a primary screen that reflects the holding period and matching strategy. Study the chart one magnitude above that period to identify support-resistance and other landscape features that impact reward:risk. Then shift down to the chart one magnitude below the primary screen and identify low-risk entry points. Analysis above and below the central chart will identify opportunity and risk in most cases. For example, when a promising setup appears on a 5-minute chart, check the 60-minute chart for support-resistance but use the 1-minute chart to time execution to the short-term flow of the market. This 3-D approach works through all time levels.
Evaluate your setup through all time frames that may affect the position. The view just above and below the intended holding period may not capture important trendlines, gaps or patterns. Study that market's multiyear history before execution as time permits to identify large-scale swing pivots. If the trade target passes through major highs or lows that are several years old, give those levels adequate attention. Other players will see the same chart features and may use them for entry or exit. Keep in mind that the importance of old price extremes decays over time, so consider the current emotional intensity of the crowd before dismissing trades based on old obstacles.
Market participants routinely fail at time management. Many never identify their intended holding period before they enter a trade. Others miss major support-resistance on the daily chart when they execute on the 60-minute bars. Some sit on non-performing positions for weeks and tie up important capital while excellent opportunities pass by. In all cases, time works as efficiently as price to end promising careers.
Choose your holding period wisely. Picking the wrong one may yield very bad results. Many novices find day trading an attractive pursuit but don't have the time or resources to properly prepare or execute profitable intraday trades. There are many horror stories about part-timers that catch a few quick gains on their lunch hours and think they've mastered the art of trading. If this sounds like you, stop immediately and find the right strategy for your current lifestyle. Time and commitment mean everything. The shorter your holding period, the more time and effort you'll need to trade successfully. There are no shortcuts. For example, throwing money at someone else's hot pick is a recipe for disaster.
Level II opens up short-term scalping strategies that can be used successfully with technical analysis. But predetermined price levels carry less importance in that time frame because traders must rely more on order flow among market makers and ECNs. For most short-term participants, holding between 15-minutes and 3-days provides the optimum conditions for profit. In this realm, technical analysis stands alone in predictive power.
