No Timeframe

A common question on here is "which timeframe is best to use?".

I would like to propose that the answer to this is "none".You should not be using any timeframe at all.

Here's a 5 min BUND from last night.



OK - so this looks fine right ? A 5 minute chart, all the candles nice & clear.

Why though do people put so much importance on any individual candle when so many people use them on so many different timeframes? If I said I used 4 and a half minute candles I'd be laughed at but people would have no problem with me suggesting the 1,3,5,10,30 and 60 minute timeframes could be used together to give a better view.

There's an 'expert' (that shall remain nameless) in a chat toom I visited room who talks of the 20 MA on their 1 min chart providing resistance, then says how you need to be careful as the 20 MA on their 350 tick hasn't been pierced yet, and that the 5 min 50 MA is close so that can't be ignored either.

Can it really be that all these MA's on all these different timeframes are relevant? Do they really provide real resistance? I would say no.

I would also say that people put far too much importance on indivindual candles instead of the overall movemement of the market. Is staring at those individual candles steering your attention away from what is important?

Now - here's my BUND chart from last night.



The tick count is 89 - which seems to suit the BUND, you could move this up but 89,100, 70, 75 - it doesn't matter. I could change it at any time and it wouldn't make the slightest bit of difference to what I do. I just use a setting where you can see lots of the action. 89 on the ES wouldn't be very good as you'd not see so much action. The timeframe is irrelevant.

Whilst the time frame is not important, the compression of the chart is. Once you compress the chart, you are effectively making the individual candles unreadable yet still seeing all of the significant price action. You see the wood but not the trees.

You can see the same double bottom on both charts but on the latter chart you can see it in context of the overall price move for the day (and prior days). I did take the trade at that point based on what was also happening on DOM/T&S. I am not advocating taking all double bottoms. It didn't give me much anyway...

I have been looking at charts like this for only about a month now. The result is that I place less trades but the ratio of winners to losers has increased.I get less bored for some reason too - I am not sure why this is but I am much more relaxed.

So - from here on in, I would like to propose that the answer to "what timeframe should I use" is "None".

Candlesticks and all other price action charts are for lazy persons who dont want to spend some serious eye time on the movement of price alone. Try this for one day. Look at you chosen market and just watch the price ticker change. A candlestick will not show you a very important factor in the market imo, the speed in which a price moves through a given range. If a price is moving slowly in one direction and pings down with ease i have my edge that others do not. I also watch for resistance and support levels on very small timeframes and also double or triple point moves which again wouldnt be shown on any timeframe candlestick.

Hi DT,
I completely agree with your comments about MAs, but not many other members will! In fact, I fear you may be in for some heavy duty tongue lashing from those who believe that MAs provide solid S&R exactly in the way that your nameless 'expert' suggests.

Regarding timeframes, I'm 90% with you on that too. To anyone who hasn't used a non-time based chart such as P&F or Renko, I recommend them enthusiastically. That said, traditional candle or bar charts do have their uses. E.g. a volume 'blow off' shows up very well on time based charts.
Tim.

Try to use the time frames and MAs professionals use and try to be as quick as they are. This is the answer. For you to see what they use you better pay a visit to a trading floor of a major bank, CTA, fund or proprietary trading house. Since it is hard to get in there if you have no friends, go to the bars these people gather after work and get aquainted with a few of them.

Have worked on a couple of prop desks at Investment banks and a hedge fund and I have never seen any "professionals" trading on any time frames at all or using MA's at all - it just doesnt happen.. maybe at some of the trading arcades people trade that way but HF traders use TA as a tool for monitoring purposes and never to generate trading ideas..
Back to DT's point about no time frames i would tend to agree.. looking at 3,4,5 min candles is not a very reliable indicator - The only reason I use any time frame at all is so I dont run my losses for an indefinate period!

so you still define support / resistance areas of higher time frame charts then use tick chart to see how price reacts at these levels ?

Not as such. I do watch the high/low of day for the past 2 trading days but between the high and low of the prior days, there's no levels of interest to me.

Most of the time, I just pick up levels from here : http://www.mypivots.com/dn/?symbol=317

I keep 2 handwritten journals on my desk when I trade and I write the key levels at the top of the page as the first thing I do when I start for the day.

I will occasionally look at the 15 min chart compressed to show the last 7 or 8 days.

Thus far today, we've had action around the central pivot and R1. I was long at 09:55 CET when the price went up to R1(132.03) and the price action totally changed at that point, so I got out at 132.00. It came off 17 ticks at that point, so I was pretty happy to be out 3 ticks below the high (which it blew through whilst I was in the gym).

I can't watch the tape all the time, I can only make sense of it in short bursts (Goldfish attention span). I only want to look at it at key levels because these are often places where people have targets or are spoofing.

Breathtaking...