Investing Stocks Using Weekly and Monthly Charts
Many investors have made a mistake in terms of technical analysis that the longest they will see is the daily chart. However, this chart does not always tell the whole story, and in many cases, investing in stocks based on weekly or monthly chart descriptions is more profitable.
One of the best indicators you can use is the exponential moving average. I personally like to draw 5, 20, 50 and 200 EMAs on my charts because they are very useful indicators.
They work well on daily charts, but they are more reliable on weekly or monthly charts. The key is to find important EMA cross-trend changes. After you get one of these intersections, you will often see prices continue to move in that direction for a few weeks or months, after which it reverses and crosses in the opposite direction. In the meantime, you can bank some significant profits. You can use EMA (20) as a good signal, but I personally prefer to use EMA EMA (20) as a good signal, but I personally prefer to use EMA (20) ) As my preferred signal. As I said, this works well on separate day charts, but as you add time frames, you get a bigger price move. In fact, sometimes you can capture trends that last a few years and create huge profits.
You can also use down crossover as a sell signal or as a lack of stock opportunity. For example, if you look at the monthly chart for any bank, let's take the Royal Bank of Scotland as an example. You will see that the EMA (5) crossed the EMA (20) in July 2007 and still did not cross up. At this time the share price has dropped from about 600p to 20p. This is clearly a very profitable long-term short position, which is the same as many other companies, not just banks.
But if you look at the daily chart, you'll see that there are more cross-use EMAs in the same period, so you do not always capture these big gains using this time frame.
If weekly or monthly charts use too long time frames, you should use them to identify long-term trends . For example, if weekly or monthly chart trends are up, you should look for buying opportunities on a daily chart.
The key is that you should always look at weekly and monthly charts as they can provide you with some valuable information (and trading opportunities). The trends in these long-term timeframes can last for months, even in some cases and even years.