New traders often wonder ‘which time frame is ‘best’’? This is very similar to asking ‘what is the best temperature’. Well, it’s relative. Some like it colder, others like it warmer; but by and large most people are in the same ballpark range of comfort. Chart time frames work like this, as well.
. This has the benefit of getting the consistency of the longer-term charts along with the granularity and detail of the shorter-term charts. The downside is that an element of subjectivity is introduced as we’re now analyzing two different charts; but provided that the trader can find ‘balance’ between the utilization of these charts, the benefit should far outweigh the additional subjectivity that’s introduced.
Use the breakout merely as a signal: The fact that buyers were able to power-thru resistance can be a positive indication of further top-side potential. But rarely is a market one-sided; after that new-high comes-in, we’ll often see traders taking profit; and even some trying to fade the move. Combine this with the fact that buyer demand is likely diminished by the fact that prices are now-higher; and we have a recipe for a pullback.
To attempt at timing the entry, the trader can wait for the pullback to begin to slow. So if we’re looking at a bullish move, we’d want to have already seen the breakout produce the higher-high, followed by a pullback bringing price closer to prior resistance; at which point we can look for support to begin to show on the shorter time frame.