We talked about it in my post a couple days ago, looking at the weekly chart and basically saying “who would buy that?”
There is a reason we look at larger time frames and not just the daily and hourly charts. Looking at something like the weekly gives us a broad view of what is going on day to day and even cleans it up a bit for us.
This is why I always say “Higher Time Frames Dominate.”
You best case scenario is when the weekly, daily and even hourly chart are all indicating the same direction.
For instance, the weekly is in an uptrend and the daily just did a bullish u-turn pattern after a pullback in what is otherwise an uptrend.
That is a solid entry signal and a position you can hold for some extension, not just a quick trade.
However, when the weekly is looking ugly after reversing hard and being extended to the upside (hint: how it ended last week) then you need to be quick and nimble with your trades to the upside on the daily chart.
I sometimes forget this myself, which is what happened when I decided not to book profits at 11k on a trade I entered at 10.1K.
Had I’d looked back at the weekly the sell trigger gets pulled in no time flat.
Let’s look at the weekly chart again…
As I mentioned in the post a couple days back, price failed to break higher after ignoring the reversal candle from a few weeks ago. The odds were price coming back to at least 9800 and meeting the 10 period average.
We have seen a bit more than that on today’s sell off, but either way odds were for price to pullback based on this longer time frame.
If you are not looking at the weekly chart to gain reference of the overall price action it is advisable to do so in my opinion. It’s another tool in the tool belt.
To learn about how I use multiple time frame analysis and spot support and resistance points check out the ScaredyCatGuide to Investing in Cryptocurrency videos on my website. They are free to watch!