The majority of my pre-session higher timeframe (HTF) analysis is conducted on the 30 and 5 minute charts.

<image: Higher Timeframe Analysis>

Exactly as outlined in the YTC Price Action Trader, in constructing an HTF support & resistance framework.

Before this though, I always have a quick glance at the daily chart. Maybe 5-10 seconds at most.

Daily chart analysis serves two purposes.

(1) It gives me an expectation for the potential daily range, being less than, greater than, or somewhere in the vicinity of the current average daily range. We covered that here.

(2) And it gives me a feel for the bigger picture sentiment. A quick assessment only; no more than a few seconds.

This was hinted at in the prior article (step 3 of that process). The focus of that article was on assessing the daily range, but as it states in the final sentence, the daily chart offers “background” contextual information that can be used as an input to your trade selection and trade management decisions.

More often than not this gives no significant information. But a few times a month there might be some structure that provides a nice trap or significant breakout which might suggest potential for the market to trend strongly in one direction.

Perhaps I’ll want to prioritise trade opportunity in one direction and limit opportunity in the other?

Perhaps I’ll want to manage one direction with more patience, whereas the other will be exited more aggressively at the first hint of trouble?

And as we’ll see today, perhaps I’ll want to be ready to act quickly on the open if there is potential for an opening trend.

This is an example of what I’m looking for:

<image: How I Use the Daily Chart>

<image: How I Use the Daily Chart>

A quick assessment. Nothing more.

The daily simply gives me a leaning one way or the other, a couple of times a month.

So that on a day like today, above the prior day’s high, I might initially stand aside through any opening sequence TTF structure which tempts me to enter SHORT. And attack any opportunity LONG.

<image: How I Use the Daily Chart>

A quick assessment only. Five to ten seconds at most.

Get a bigger-picture feel for the daily range and whether or not there is potential for extremes of sentiment to be driving price today.

And then drop to the HTF/TTF timeframes to commence your normal structure & trend analysis.

Happy trading,

Lance Beggs

 


 

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