I like the 15 min chart – day session only. It eliminates the sometimes erroneous price action of the globex session. It fits the day session perfectly as the session is 6.75 hrs long – a perfect multiple of 1/4 hr. Shorter time frame charts such as 5 min or tick and volume charts may be more exciting to work with as there are more data points and pivots to work with, but I think that sometimes less is more. In other words the slightly longer time frame of 15 mins is still easily adaptable and suitable for the day trader. Though it offers less signals over all, I think there are less false signals in the longer time frame chart. You may sometimes need a wider stop with longer time frame charts, but you always have the option to not take a trade and wait for the next set up. In the chart below I have tried to identify some of the highlights of working a set of Median Lines in conjunction with the Fibonacci extensions. This is proving to be a powerful combination. Most set-ups shown on the chart were in the profit zone quickly with little to no ‘heat’. I started running out of real estate for text notes and arrows on the chart so I plotted a few ID numbers.
#1 points to a few places where price was finding support/resistance at the quartile (represented by the dashed line). Look further back and forward on the quartile to see some other touches where the quartile acted as support / resistance. Note that only one quartile is plotted. The other quartile also came into play but is omitted here just to clean up the chart a bit. I just cant show everything I look at as it will be too cluttered to explain.
#2 points to some price action finding the Median Line as support / resistance. Remember that Dr. Andrews taught that price would be attracted to the median line from the outer tines and that 80% of the time price will achieve a return to the Median line. As you can see in this week long chart that price started at the Median line and came back to that median line as if it were a magnet. Further more price ends the weeks turbulence only 2 ticks from the Median Line.
#3 points to a breakdown through the lower tine. A trader standing in front of that price level looking for the long would have been run over with little chance of getting out without the protective stop being hit. It is important to note that there was NOT a VALID trade set up at that point. For reasons, too many to mention here, there was not a trade triggered at that point. The trader must develop a set of trading rules for entry, profit target and stop loss. Proper risk management rules and a price structure based stop loss is absolutely critical. Even though the bottom tine was there looking like a possible long there was no reasonable price structure stop available . The nearest stop was below 66 and was simply too far away to take the trade.
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