Chart Frequencies

[Dow Dog]

Up until now I have always used 5 minute bar charts for my trading.

In the past few days I have taken to looking at 1 minute charts and have noticed that I get many more trading signals ( using my method ) than with 5 minute charts.

In general would the accuracy of the signals be any different with 5 minute charts than with 1 minute charts ?

 

[Trader333]

Without knowing your exact method it is difficult to say but I remember a comment by Scripophilist on some analysis that he had done. It showed that the shorter the timescale the more random the price movement. Based on that there is a higher chance that these signals would be more inaccurate than those of a longer time frame.


Paul

 

[Dow Dog]

Yes that makes sense.

I think I will do some analysis using 1,3 and 5 minute charts to see which one yields the best results for me.

Probably best to trade live using all 3 and see which really suits my style the best. I have a gut feeling it will be 3 minutes.

 

[Dow Dog]

Ran a few quick tests. Early indications are that 3 minute charts will provide me with more trading opportunities with larger profits and smaller losses per trade.

1 minute charts just give too many false signals.