Thank you for the excellent service. Can you refresh the beginner traders why you prefer to use 5-year weekly charts with a 200 EMA versus a 1-year daily charts?

David Fuller's view Thanks for the feedback and a question of general interest.

Our preference for weekly over daily charts can be explained in one word - perspective. However, it depends on what you are doing. For instance, if day trading, heaven forbid because there would be little time for anything else, I would be looking almost exclusively at intraday tick charts. These enable one to scrutinise the market as if it was under a microscope and will show the same trends, congestion area trading ranges and trend endings as you see on longer-term charts.

Moving up the time scale, as a short-term trader meaning holding positions for a few days to several weeks, I would focus mainly on daily charts showing a year's history but I would also want to be familiar with the weekly chart for perspective.

As a medium-term trader looking to run trends while they persist, whether for a matter of weeks or months, I would be looking at both weekly and daily charts.

As an investor, I would be looking mainly at longer-term charts such as weekly 5-year and 10-year, and occasionally monthly charts of 20 to 50+ year's duration on semi-log scales for additional perspective. I would also look at daily charts for timing when adding to or lightening a core position. Similarly, I would use the 200-day MA on weekly charts, to see overextensions and mean regressions, adding to positions near the MA within trends and lightening when they become overextended relative to the MA.

Lastly, the most important buying opportunities occur when everyone is terrified following market plunges. As an investor or trader, picking up value stocks which are clearly overextended relative to their declining MAs is usually a good idea.