A very frequent question which arises in the minds of new or even some experienced traders is how often to check the technical/candlestick charts while trading or having an open position in the stock or commodity market. Well to answer this in one work I would say ‘It depends’. Now let’s see on what exactly this would depend.
We know that any technical chart which we see has a time interval for every candle made on the chart. Most of you may now how guessed the factor which is to be considered while taking decision to view charts. Yes , it the right – ‘The time interval for which you want to hold the position’. In short, you need to decide whether its going to be a short term trade(say 1-2 mins or an hour or any intraday day) , medium term trade(a few days maybe) or a long term trade(weeks or even months).
While trading with charts, trend is our friend and we need to know what the trend for our duration of trade is. Now there are various trend indicators like volume, stochastics, Bollinger bands, wave patterns, MADC, RSI and many more, I personally follow volume and stochastic indicators to take position.
Now if I want to take a short term trade wherein I want to exit my position in a few minutes or upto an hour, I will follow a chart similar to below.
This one shows the price movement of SAIL where each new candle in formed after 5 mins and accordingly the volume and stochastics is also displayed. So, I will keep an eye of the chart every 2-5 mins maybe.
Similarly, below are the examples of hourly chart and daily charts for SAIL where each new candle will come up each hour and each day respectively. In which case I will follow the chart on hourly basis and daily or twice/ thrice a day based on my targets and changes in chart patterns.