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Eating My Cake Too On Multiple Time-Frames

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November 05, 2012 – Comments (0) | RELATED TICKERS: CAKE

I will often stress the importance of trading off of multiple time frames. Typically, if I can get a short-setup to line up on the 5 minute and daily charts that is usually a setup that I won't hesitate to take. 

But finding trades that line up ideally on multiple time frames isn't the easiest setups to find, so often times, as traders, we'll look at one time frame, like what we see, and be done with it. 

In the case of Cheesecake Factory (CAKE) though, you'll see that it lines up perfectly on the five-minute chart that shows a rejection at a well-definedresistance level, as well as a developing head and shoulders pattern

CAKE short setup on the 5 minute time frame

Now look at the daily chart, and you'll see a well-defined down-trend since the beginning of October where the price action has been unable to get back above the declining trend-line and that helps to define the risk on the trade, and in this case, it's only about 2%, which is hard to beat for swing-traders. 

CAKE short setup on the daily chart

 

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