Totally Confused-Timeframes

Hi,
I am a total newbie and have spent some time reading books/internet trying to acquire some Forex training knowledge and have become completely confused and I can see why most people lose their money, quickly and easily. I have decided to use certain indicators and EMA lines to make a decision as to when to go short or long, however, I am unsure as to what timeframes I should be utilising. My EMA lines and indicators may indicate going long/short in a H1 frame but then when switching to M5/M15 things have gone out of alignment and no longer indicate going long/short.

Any constructive advice would be appreciated

hi Dallir,
if you are using hourly time frame, than make sure you hold the position for atleast 2 days to achieve your targets, and it is not meant for intraday trading... if you are into intraday trading you can go for 7 minutes time frame. which for a newbie will be more fast though. so i would suggest you for hourly basis trading if you r new & be prepared to hold the positions for atleast 2 days in this time frame...

Imagine timeframes as harmonic series within a square wave and you'll be getting close

Hi dallir - Welcome to trading, I hope it goes well for you.

After price chart displays, MAs are the first thing most of us learn, but conversely, I think they are definitely not for beginners.

OK, whatever the time frame, you can use MAs in the classic approach for trading, i.e. crossovers giving the entry signal, but they have some inherent disadvantages which make trading hellishly difficult.
They are lagging indicators, so they show nothing until the move that motivated the MA level has already happened. The longer the period, the more time that must have elapsed before they show an entry, and the more possibility that you will be getting in late at a disadvantageous price.
If you shorten the period, you will get earlier entires, potentially a huge number, but a higher percentage will be false signals.
Don't use the reverse crossover for the exit signal: price could have moved seriously into profit and then against you by then. This approach is why so many academic studies 'prove' that MA-based trading can't work.
The percentage of false signals is high with all time frames and MA periods, so you need to have tight and disciplined stops and be prepared to have significant drawdown.

I don't really do daytrading but there are many other approaches. Do try some of them with a little money first.

dallir said:

Hi,
I am a total newbie and have spent some time reading books/internet trying to acquire some Forex training knowledge and have become completely confused and I can see why most people lose their money, quickly and easily. I have decided to use certain indicators and EMA lines to make a decision as to when to go short or long, however, I am unsure as to what timeframes I should be utilising. My EMA lines and indicators may indicate going long/short in a H1 frame but then when switching to M5/M15 things have gone out of alignment and no longer indicate going long/short.

Any constructive advice would be appreciated

Click to expand...

Which time frame you use depends upon your trading style and method. Yes, different time frames can give conflicting signals. Actually some trading methods make use of these conflicting directions to generate trading signals (e.g. triple screen method).

I was hoping to look at the charts on daily basis due to work commitments. I was going to use 200 EMA to give general trend, 5 EMA/8 SMA for price action and 21/55 EMA to give momentum. I was using the MACD settings of 21,55,8 and the stochastics at 8,3,5. When the 200 EMA was trending up/down and the 5,8 and 21,55 crossed up/down I would consider shorting/going long. I would also use Stochastics to have crossed up/down as a heads up and then waited for MACD to cross and then carried out the trade. Is this completely wrong???Remeber I am a total novice!

dallir said:

I was hoping to look at the charts on daily basis due to work commitments. I was going to use 200 EMA to give general trend, 5 EMA/8 SMA for price action and 21/55 EMA to give momentum. I was using the MACD settings of 21,55,8 and the stochastics at 8,3,5. When the 200 EMA was trending up/down and the 5,8 and 21,55 crossed up/down I would consider shorting/going long. I would also use Stochastics to have crossed up/down as a heads up and then waited for MACD to cross and then carried out the trade. Is this completely wrong???Remeber I am a total novice!

Click to expand...

we have a lot of indicators on that chart... that is going to be confusing for sure.....

I am wondering if you would consider stripping 90 per cent of them from the chart and then start to learn support and resistance and price action... you will frustrate yourself with that chart

dallir said:

I was hoping to look at the charts on daily basis due to work commitments. I was going to use 200 EMA to give general trend, 5 EMA/8 SMA for price action and 21/55 EMA to give momentum. I was using the MACD settings of 21,55,8 and the stochastics at 8,3,5. When the 200 EMA was trending up/down and the 5,8 and 21,55 crossed up/down I would consider shorting/going long. I would also use Stochastics to have crossed up/down as a heads up and then waited for MACD to cross and then carried out the trade. Is this completely wrong???Remeber I am a total novice!

Click to expand...

take all that shyte off your charts today.
if you're looking on a "daily" basis, all you need are Weekly Pivot Points

believe me, that'll be more than enough.

but ferfuxake, do yourself a favour, and dump that other krap instantly !



.

Please don't use moving average crossovers or MACDs as entry/exit signals. Finally, forget forex to start with...far too much fundamental crap affects forex pairs for any newbie to keep up with. Start with stocks/futures in my opinion. Watch them for a bit and see how they move. Then play with small money and work your way up slowly as you gain consistency.

amit1986 said:

Please don't use moving average crossovers or MACDs as entry/exit signals. Finally, forget forex to start with...far too much fundamental crap affects forex pairs for any newbie to keep up with. Start with stocks/futures in my opinion. Watch them for a bit and see how they move. Then play with small money and work your way up slowly as you gain consistency.

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Macd is a killer in chop. and if the market is 70 percent chop....... a trader using macd gets killed.

Some excellent advice given in here
My thinking is support and resistance or as someone else said, pivots,

Definitely clean off that chart

All I keep hearing about and seeing is MACD, Fibonnaci etc. I appreciate the honesty in your replies. I will have a go at the support and resistance levels and pivot points and see how things go. Many thanks for taking the time to respond to my post!

Just one more thing, should I not be using any indicators then? I don`t expect someone to give me their system, but judging by the previous posts it seems as if they may be too advanced for a newbie?

dallir said:

All I keep hearing about and seeing is MACD, Fibonnaci etc. I appreciate the honesty in your replies. I will have a go at the support and resistance levels and pivot points and see how things go. Many thanks for taking the time to respond to my post!

Click to expand...

these guys know what they are talking about. they have learned and are sharing real experience...

dallir said:

Just one more thing, should I not be using any indicators then? I don`t expect someone to give me their system, but judging by the previous posts it seems as if they may be too advanced for a newbie?

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I think we have to find some info on pivots and support and resistance and get that to you, I will have a look to see if I have some stuff that I can post in the thread for you, and maybe others can point you to some things that they are aware of

This is not too hard for newbie, this is where the action is........ and a lot simpler than what you have been attempting

Cheers buddy.

sometimes NOT trading IS trading !!!

right now on the ES mini contract price is around 1311

i have weekly triggers set up with audio alerts to let me know when price approaches:

if price rises above 1321, I will go Short at 1320
if price dips below 1299, I will go Long at 1300

until then i couldn't give a hoot about MACD this or that, Stochastics, which have to be the WORST BS i've ever seen, or any of that other crap.
I'm just chilling out at home, watching a movie and waiting for an audio alert to sound.

doesn't that sound a better way to do things than fannying around trying to grab a point here and a point there, depending on what MACD or some other krap "indicates"

dallir said:

Just one more thing, should I not be using any indicators then? I don`t expect someone to give me their system, but judging by the previous posts it seems as if they may be too advanced for a newbie?

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the irony is, only newbies use them

after a while, most serious traders will ditch the majority of indicators.

it's not that they're "advanced", they're just shyte mate !

IMO the only indicators you should consider are ones showing exactly what has and is happening (price bars), a few lines that you've drawn and statistical indicators, for example, average range for determining stop size and how far price is likely to move in a certain time period: if price usually moves 150 pips an a day but today it has moved 300 (and in your favour) maybe you should close the trade, it is going to retrace).

Any indicators which are derivatives of price i.e. moving averages, stochastic, macd etc are pretty much a waste of time. You can make a system that 'works' utliising them but they're clunky at best and will hinder you more than help in the long run.

As already said learn about s/r. Not everyone's definition of it is the same but find YOUR definition that YOU can trade and figure out how/why price moves as it does around these levels and around pivots. Not everyone agrees on the why but it doesn't really matter. Trade YOUR reasoning and you'll be fine.

What is seen as a pivot on one timeframe often appears as a supply/demand area on a smaller timeframe, funny that.

When you've got it more 'figured' out in your head you'll know more when to trade with the larger prevailing 'trend' and when to go against it.

Cheers guys

There are some very bright successful traders who've contributed to this thread, but I'm going to disagree with a few knowing that they're grown ups and their stable mind-sets means there'll be no silly flaming war..

OK, indicators and chart patterns do *work* in as much as, at you level of development, they can give you a reason to get into a trade and a reason to get out and one of the inherent benefits that can instill in you and your trader discipline is money management/capital preservation.

I swing trade multi FX pairs, I cannot possibly watch up to 9 pairs concurrently and look for price action, therefore I have my alerts set to scream when a combination of indicators trigger, or certain levels are reached (S+R, 200MA etc) either on a 2HR+ chart of a lower time-frame tick adjusted chart; they align I pull the trigger at any time of the day I've made myself available, if I'm too late I may pass unless I'm convinced price has reverted (temporarily) but the trend is still *right* in terms of my judgement.

90% of the trades I take go into profit (that doesn't mean I have a 90% success rate, some are in profit for a miserly few pips) 65% of trades are winners...actually last week it was closer to 50% out of 14 trades taken, but I was still profitable..Now I could change, I could trade a single pair by staring at the Euro chart all hours, looking for 20 pip+ PA opps. to flag up, tried that, it's just not me even when still swinging in the background.

As for entries, you mention MA x-overs, well there are legendary traders and trainers out there who've used 2 MAs and nothing much else on their charts for years, hasn't harmed their development..

So don't simply dismiss indicators and or patterns out of hand, ask yourself what they are, Google/you-tube for examples of price action or S+R+ daily pivot trading, practice and see if you overlay any indicators whether or not the result would have been that much different. Is PA any more reliable, what are we looking for, price acceleration away from a given point; away from the mean (an average) or the daily pivot? Are there other ways of seeing that?

I actually recently re-visited an old strat. I used a couple of years back, worked well at the time; stochs, macd, rsi, couple of MAs (one exponential) and used the psar for exit..it still 'works' OK vis a vis other methods. Bit messy, bit unecessary (same info. different maths genius), mightn't get me in as close to the 'b of the bang' I want to be now but heh..

Oh and aim for excellence not perfection and you must have the intellectual curiosity to go and discover what works for you. Don't lose sight of the fact that you're dealing with probabilities, it's a given that most of us on these forums are right at the nitty end of the food chain, so we havn't got a clue what price will do next..No G.Sachs BSD on here going to give you a heads up that he's dumping the equivalent of Libya's sovereign wealth on the Euro this afternoon..

Oh, one more thing, Gerald Appeal, Welles Wilder, George Lane..wtf do/did they know eh? Bunch of maths nerds