There really isn't any specific way to look at TA indicators in two time frames and try to rationalize the trade. Generally, the best thing to do is to look at a longer timeframe, such as a week, to get a good idea of the long-term trend in price movement. Then move to the daily chart, which will give you a better idea of when to enter the trade in the direction of that longer movement.
For example, if you are entering a long term position, and the weekly trend is obviously up, then you may want to use the daily charts to tell you when there is temporary weakness, which would be a good time to enter. This divergence between charts is typical, and can work in your favor by signaling good entry points in an overall trend.
But with regard to specific indicators, such as RSI or Stochastic, don't even try to look at two time frames at once. It won't work. Pick one and stick with it, depending on what kind of trades you are into.
Are you day trading? Use 5 or 15 minute charts. 30 day options? Try daily charts. Long term leaps? Move back to weekly or monthly charts. In each of these timeframes, the specific indicators will work better depending on your strategy.
Also, based on my experience, one should avoid the trap of getting so wrapped up in indicators that they control the trade. TA is very helpful for signaling overbought and oversold situations, but it is only one tool among many. Basic common sense, along with good sources for FA and TA, all need to come together.
-David |
