Hi Sam,

Enjoyed your insightful article on 1/26 about supply & demand but my question is: Which chart time frame is most useful? As you know, different time frames will show different pictures so which do you recommend?

Thanks for the email. There are two parts to this answer. First, this depends on what type of market speculating you are doing. Are you looking to day trade, swing trade, or trade with a longer term time horizon? Maybe you will do all of the above.
Whatever the answer is, you need to have a set of time frames that is appropriate for the type of trading you do. Second, make sure you use more than one time frame; typically two or three are perfect. We use a larger and smaller time frame for specific reasons. The larger time frame shows us clearly where price is at with regard to the larger time frame supply and demand curve. This tells us whether we should be looking for longs or shorts. Then, we use a smaller time frame to find our low risk / high reward supply and demand opportunities. Let's use a swing trading example to tie this all together. In the Extended Learning Track (XLT) - Futures swing trading sessions, I use weekly and monthly charts to quantify where price is at on the supply and demand curve. If price is near larger time frame demand, I will then go down to my smaller swing trading time frames, the daily and hourly, to look for demand levels with big profit margins. This approach gives me the real probabilities and true profit margins. Hope this was helpful.

Hi Mr. Seiden,

I have been trying to form a strategy since coming to Online Trading Academy last year that would give me the opportunity to raise enough money to take the XLT course. I have not been confident enough to implement it. My strategy was to play one stock, namely Rimm . My goal was to buy or sell it at the high/low after the first 15-min candle using the 1/3 of the high or low as my stop with a profit exit of $.90 -$1.00/sh. However, I also tried to combine that with my attempt to identify the supply and demand zones which I seem to not do correctly. I am using a 5-min chart for entry and a 15-min chart to follow and exit. Would you please tell me if this seems like a strategy that is sound or not?

Thanks for the email. There are three important things here you may be missing. First, if you are going to trade one stock, it is very important to analyze the appropriate index, as well. For RIMM, consider first performing your supply and demand analysis on the NASDAQ, perhaps the QQQQ (ETF for NASDAQ). Once you find your supply and demand turning points, then find the corresponding supply and demand turning points in your stock, RIMM. This will help you filter out supply and demand levels that are not quality.
Second, your time frames may be an issue. Even a day trader needs to look at a larger time frame to determine whether longs or shorts have higher odds that day. By only looking at a 5 and 15-minute chart, as you say, how do you know where price is in relation to larger time frame demand or supply? For example, you may have the best-looking buy setup on a 5-minute chart at a demand level, but what if it is occurring right at larger time frame supply, seen maybe on a daily chart in this example? Chances are that this buy setup will fail, but you would only know that by including a larger time frame (60-minute or daily perhaps) in your analysis. Lastly, make sure you are identifying true demand and supply levels. Many people have the wrong definition of what a quality level looks like or what the requirements are. In the XLT, we use a checklist called "odds enhancers" which helps us quantify and qualify potential levels. Hope this was helpful.

Hi Sam,

As always thought-provoking. I have agonized over how to determine the trend for a decade and now have five methods including using trend lines but unconventionally. Regarding your last article, thanks for adding number five.

Thanks for the email. I can literally write a full day course on your email. There is a reason why you have been agonizing for a decade over the topic of Trend. Conventional trend analysis consists of higher highs and higher lows for uptrends and lower highs and lower lows for downtrends, up–sloping moving averages for uptrends and down sloping moving averages for downtrends. As you say, I can go on and on with these conventional ways of identifying uptrends and downtrends, but you have already spent ten years doing that so "stop the presses," let's not waste any more time. In short, conventional trend analysis is very faulty at best for use as a method of attaining the low risk / high reward, and high probability entry into a market. It is a very high risk, low reward, and low probability method that makes no sense to the astute market speculator. Think about it this way if you don't agree with me. Imagine if you used conventional trend analysis to buy things in every other part of your life. For example, only buying a car after the price went up, only buying your house after others bought similar houses in your area and price was now rising, ignoring sales at the grocery store and instead, only buying items when price was moving higher. If you used conventional trend analysis that is written about in almost every trading book to buy things in other parts of your life, you would be broke. On the other hand, your neighbors would love you for driving their property values higher, the car dealer would give you a big hug and thank you, and the grocery store owner would welcome you with a red carpet and some free coffee perhaps. So, there is a trade off - money for love, I suppose. Of course, I am kidding (though this would really happen), but you get the point. The biggest misconception in the world of market speculation is that somehow, the proper logic and rules are in any way shape or form different from the logic and rules you use to buy things in everyday life. The short answer is to set a date where you will no longer focus on your quest for "trend information". End the ten year cycle and focus instead on key supply and demand levels. Every trend begins and ends at price levels where supply and demand are out-of-balance. Identifying these levels is not that difficult once you have a solid understanding of the concepts and rules. That picture of higher highs and higher lows that you likely wait for to buy into a market, many buyers have always bought before you each and every time. Why can't that be you? Why does it always have to be someone else? When you shift your focus from conventional trend analysis to the reality of how and why market prices change direction, you will then have a strategy that has you entering before all the book readers and conventional buyers. We love the conventional concept of trends, we just want to be in the market before that group pushes the buy button. Again, I can go on forever with this topic but I will save that for another day. Hope this was helpful.

As always, thank you for your feedback and questions. Also, thank you for your loyal readership. It is really a privilege to share market information with you.