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Bulls on Wall Street: Stop Guessing. Start Trading.

As a day trader, it's easy to get so focused on every little tick that you lose sight of the big picture. Just because you don't pay attention to long-term timeframes doesn't mean they don't impact your trades. Here's a great example from a few months ago.

I was shorting $JNUG intraday, with entries at $312 and $310. After loading up the position, the stock sat there for two hours, building what appeared to be a base. Some of the traders in the chat noticed what appeared to be a bull flag forming. They wanted to dump the short position and go long. This was understandable but incorrect.

jnug-intra

But now zoom out an look at the daily chart - the longer term timeframe.

jnug-daily

But you have to zoom out and look at the daily - it had run up from $15(0) to $30(0) (a forward split was executed on $JNUG later in the year, hence the 1/10th price in the above chart )without stop, so it was overextended. Regardless of how the intraday looks, it's dangerous to go long on a daily chart that's so stretched.

Use your daily charts for idea generation - finding stocks with patterns give you an idea of what they are likely to do next - and put them on your watchlist. Then use intraday charts to pinpoint your entry when a stock from your list is making a move.

Want to learn more? Just send me an email at kunal@bullsonwallstreet.com!

About Kunal Desai

Kunal Desai is the Founder and Lead Instructor at Bulls on Wall Street. Since 2010, Kunal has helped thousands of traders reach their trading goals through his unique live trading courses. Kunal is a day trader by day and industry leading instructor by night.

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