How I choose my time basis for chart analysis

When I first tried to analyze a stock chart I wondered which time basis I should choose. Many traders  on eToro give some information about their personal attitude and I am looking forward to get more detailed insights from @Trex8u247 soon. While waiting I studied charts and thought about what they are trying to tell me about the market-trend. Here is my theory based on my experience so far:




The indicators used for a chart analysis will indicate the market trend for the time period chosen as basis for the analysis.

That means: If the result of a chart analysis indicates a bounce up, it is only "valid" for the time period that the chart was based on. If the time basis was 1 Min, the analysis can only indicate what happens in the next minutes but will not give you any clue what is happening in the following days. Therefore you have to switch to a daily time basis and evaluate the indicators again. The reason is that the chart movements are working in different time steps too.

I will explain on an example (again I use copper). If I draw the chart on a time basis of 1 d, it shows 2 buying indicators:

1. There is plateau no the lower Bollinger band, which indicates a bounce up. 
2. The MACD shows an upwards trend since the beginning of the plateau
3. The RSI doesn't tell me anything here

My conclusion is, that copper will go up within the next days, maybe weeks.




Now check out the same chart on a 30 Min time basis below. It shows a different picture.

1. The chart crossed the upper Bollinger band but is now going below again. My interpretation is a week selling signal
2. The MACD shows a downwards trend - also a selling indicator
3. The RSI again doesn't add any value to my interpretation

My conclusion of the chart analysis above is: Copper will bounce up in the next days, but will first go down in the next hours.

In order to get an overall conclusion I look at the chart with different time basis and compare the results:

• If all charts show the same trend: This is obvious. 
• If short term shows up, long term down: Time to be careful. It might be possible to make some profit on the short term movement with buying positions. But if the best selling point is missed, there is a high risk for losses.
• If the short term shows down, long term up: Same as point two, just vice versa: short term gains with selling options possible but risk if buying time is missed.

Meanwhile a fellow trader on eToro posted a link to his block, covering the same topic. Thanks to @Trex8u247 for your effort: http://trading-the-market.blogspot.de/2016/09/best-time-frame-to-analyze-market-with.html