Since I’ve discussed charts so much in my previous eBooks I don’t think that I
need to say much here about them, so I’ll get straight to the point. With the
“Sailing” techniques taught in this eBook there are two primary chart views
that you’ll be mostly dealing with, and several supplementary views.
The two primary chart views you’ll be working with are the Hourly charts and
the Daily charts. The bulk of your trading will be directly based on your
analysis from these.
Two of your supplementary charts will be the Weekly and the Monthly
charts. Though you technically could do “Sailing” trades directly off of these
chart views most often you would find that the required stops would be huge
(too large from most practical purpose – though if conditions are right, rarely,
then you might do so) and the duration of those trades would often be a very
very long time (though if it is profitable then who cares, right?). The reason
why you will be using these charts is to larger market trends and armed with
that knowledge you’ll be able to apply it to smaller applications on your
Hourly or Daily charts. These are your “big picture” charts.
Another two of your supplementary charts will be the 8 Hour and 4 Hour
charts (and sometimes the 2 Hour charts). Because the 24 hour day is
segmented into blocks of time (“consolidation time”, Asian/European overlap
time, and European/N.American overlap time) you’ll find that these charts are
valuable to see a certain perspective of how these “times” behave
collectively. Though the chart’s segment of time doesn’t directly correlate
with those above mentioned time segments it does still provide a rough
fit. For example, the first 8 Hour candle of the day includes 2 hours of just the
Asian market (generally considered minor consolidation time), then the
Asian/European overlap time, and then 2 hours of just the European market
(again considered minor consolidation time). Thus I think of the first 8 Hour
candle as the Asian/European candle. The second 8 Hour candle starts off
with the start of the European/N.American overlap time, which lasts for half
the duration (4 hours – hence why the 4 Hour candles are also nice to use),
then the second half of that candle is when just the N.American market is
open (considered the start of consolidation time), and ends shortly after the
end of N.American close. I think of this second 8 Hour candle as the
European/N.American candle. The third 8 Hour candle is basically the major
consolidation period. Period.
Thus the three 8 Hour candles that total a day are considered as:
1. The Asian/European Candle
2. The European/N.American Candle
3. The Major Consolidation Candle
The 4 Hour candle charts are less often used as they don’t have as clear a
correlation, but the 2 Hour charts are better for that purpose. Basically the 8
Hour and 2 Hour charts are really to see clearer than Daily candles or a more
condensed version (slightly bigger perspective) of Hourly candles.
Another nice supplemental chart is the 15 minute charts. These give you more
detail than the Hourly charts (for when you are using mostly Hourly
timeframes for your trade). It also gives you a much cleaner view than 5
minute charts (or even 1 minute charts) when looking at the finer details for
“Sailing”.
The 5 minute and 1 minute charts are not used at all for “Sailing” per se, but
some of the “Sailing” techniques might benefit from an entry based on a
“Surf” or a “Scalp”. If that is the case then yes you do use those charts but
only to accomplish the trade based on “Surfing” or “Scalping”
methodology. These tiny timeframes are thus only used for specialize
purposes in conjunction for “Sailing” requirements.
So to summarize your primary charts for “Sailing” are Daily and
Hourly. Your secondary charts are Monthly, Weekly, 8 Hour, and 15 minute.
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