Talking Points:
• Time frame analysis is just as important to trading as price action
• Traders should look at charts that match their trading strategy
• Using a chart that does not match your time frame can lead to false signals
So much market analysis relies on price action but not enough attention is devoted to choosing a proper time frame. Looking for trades that fit your time horizon is essential to forming a strategy. Short-term traders may want to look at charts with smaller time intervals and long-term traders may find it more useful to look at daily or weekly charts. Using a chart that does not match your time horizon may give false entry points. Considering the Dollar breakout after the NFP data release, an investor should choose a time frame before deciding how strong the move was as a trading signal.