I sometimes find myself having odd conversations about arbitrary time frames. Most people pick a time frame arbitrarily, so it doesn’t’ really make sense if they don’t know what they are doing. For example, if we want to know the direction of a trend, we need to be able to determine a time frame the defines the direction. Some time frame needs to identify it as up, down, or sideways if you want to know its direction.
As I was looking at some data, I thought this would make a great observations of what I mean. It doesn’t matter what this is, just focus the fact that it’s the same exact data over the same time period (May to November), but a different time frame.
Below is a daily time frame of the data. Notice, it’s hard to see much of a trend, except their appears more activity prior to August. See a directional trend? Not really.
Next, we observe the same data, but on a weekly time frame. Starting to see a little direction. A little more so than daily. The more recent period seems down a little relative to the prior period.
Finally, we observe the same data, but on a monthly time frame. Yes, the directional trend is now clearly down…
Same exact data over the same exact time frame, very different observations of its direction.
Time frames can fool you and some can be completely useless. Or, they can define the direction with more clarity.
