Monday, December 3, 2007

Chart Triptych


I use a chart triptych as recommended by one of my teacher/mentors. This one is recommended by Philippe Cahen in his fantastic book on his copyrighted trading methodology called, "Analyse Technique et Volatilite". Yes, it is written in French. I spent 8 weeks translating it into English so I could use it. He wrote an earlier version in English titled, "Dynamic Technical Analysis".

I use 3 time horizons on my screen (this constitute the triptych) at all times to give me context. I also check the daily charts each day, and often I look at other time intervals as well.

One of the reasons that I like this method of trading so much is that it truly is dynamic. Instead of using static settings and fixed lines, this method takes into account the dynamic, constantly-changing nature of the financial markets, including for dynamic support and resistance using Bollinger Bands and EMAs.

Another reason that I prefer this method is that it is entirely visual in nature. I must be very visually-oriented. I have modified and added other indicators to Cahen's method, but I have kept the triptych, which I consider to be a necessity.