Ask Colin

For medium to longer trend definitions (peaks & troughs) you seem to use weekly rather than monthly charts. Is this because monthly charts will give you signals that are too late?

No, it is not that. I do use monthly charts. However, it does not matter whether you use daily, weekly or monthly charts, providing there is enough detail to see the pattern.

There are two problems:

1. If you use daily charts, it is possible to see too much detail and not see the bigger picture.

2. If you use monthly charts, there may be too little detail to see the trend clearly.

Weekly charts are a good compromise, and therefore I often use them when teaching, but it is no more than that. It is still possible to miss the big picture on a weekly chart, or to see enough detail sometimes.

I always look at a stock starting with the monthly chart. I then look at the weekly and lastly the daily. That way, I hope to see the big picture first and work down to the detail with the big picture in my mind.

However, in the end it is very largely a question of experience. I have been looking at thousands of charts for 30 years. A newcomer will take some years to develop my experience or anywhere near it. Until then, a beginner will struggle with this most difficult of questions.