It's especially important to appreciate the order in which price charts should be studied in performing a thorough trend analysis. The proper order to follow in chart analysis is to begin with the long range and gradually work to the near term. The reason for this should become apparent as one works with the different time dimensions. If the analyst begins with only the near term picture, he or she is forced to constantly revise conclusions as more price data is considered. A thorough analysis of a daily chart may have to be completely redone after looking at the long range charts. By starting
with the big picture, going back as far as 20 years, all data to be con­sidered are already included in the chart and a proper perspective is achieved. Once the analyst knows where the market is from a longer range perspective, he or she gradually "zeros in" on the shorter term.
The first chart to be considered is the 20 year monthly chart. The analyst looks for the more obvious chart patterns, major trend-lines, or the proximity of major support or resistance levels. He or she then consults the most recent five years on the weekly chart, repeat­ing the same process. Having done that, the analyst narrows his or her focus to the last six to nine months of market action on the daily bar chart, thus going from the "macro" to the "micro" approach. If the trader wants to proceed further, intraday charts can then be con­sulted for an even more microscopic study of recent action.