It’s my belief that chart patterns behave similarly in all timeframes. As a result, I have been using 1- and 5-minute charts for intraday day trading and 5-,15-, and 60-minute charts for short-term swing trading over the last few years with great success.
It’s very important to start your day analyzing pre market action, when pertinent news may be affecting price and then 10-20 minutes after the opening with a thorough examination of the patterns developing early on, including both price and volume, as well as taking into consideration the opening gap, if any. I am, at that time, looking for key breakouts over resistance accompanied with strong relative volume. An excellent way to judge relative volume is Worden’s volume buzz, which tells you how much volume is trading at any point in time relative to historical volume at that point in the day. I am seeking strong early price % gain leaders who also possess strong relevant volume.
I then continuously draw and monitor/update throughout the session my trend lines, channels, and important developing continuation patterns such as flags, pennants, coils, in addition to adding support and resistance lines for targeting purposes and to be able to catch an intraday move that begins later in the session as a result of an intraday breakout of one of those continuation patterns. My opinion is that volume is key and the combination of price and volume or “the price/volume surge” as I’ve coined it, is critical. I also watch and monitor stocks moving averages (10-, 21-, and 50- period) and oscillators (stochastics, Bollinger Bands, and MACD).
My favorite daytrade pattern is an opening gap or fast early price surge that settles into a steady rising parallel channel throughout the trading session .For swing trades I look for key breakouts, perhaps quick tests of those breakout points followed by a channel up over a 3-5 day period on the 5- or 15-minute chart. I set targets or price objectives based on prior overhead chart resistance or measured moves/fib levels, etc., and set stops when support, trend lines and/or moving averages are violated. I tend to scale out positions at designated trade targets or use trailing stops under key levels.