I received a few questions this week via twitter that centered around my use of “perspective” in posts and why I view it as an important component in my trading. Although I do a great deal of intra-day trading myself, I always make a point of understanding the various time frames that others may be trading from.
For an example, lets take a look at a few charts of CIEN (Ciena Corp). Here is a Daily Area chart showing an in-progress TL test:
For those that are trading in a 3 month time window, this will look like a good Breakout opportunity with good volume on this up move through the Trend Line. However, let’s take a look at the Weekly chart so that we get some perspective on what others may be seeing and thinking:
For those trading in this time-frame, this looks like a nice base being built – with price working its ways to the top of the channel and 2 of the largest Volume at Price bars at this price level. Something to consider.
So in summary, always be sure to know the perspective of others while in a trade. Know what they see, know what they may be thinking, and be true to what you perceive as your edge.