No Timeframe

[Shakone]

When you are trying to learn something complex like market movement, you have to place some order/structure to it. There are so many micro movements, that you have to filter some out, and one way to do this is to look at a timeframe candlestick/bar. They don't contain all the information of that time period, but I would argue that since they contain the high, low and close, they contain the most important info. It might not be the best way to view the markets, but it is a decent filtering system. Are tick charts better? Maybe. But for spot forex, what are you getting on your tick charts and how relevant is that? Looking at the big picture is well known. I don't think many would argue with that.

As for MA's providing support and resistance. Well on one hand if it bounces off it regularly, you can argue it does. But for me, I don't think they do, but I do think they 'appear' to provide support, since when there is a strong move, the pullback will often come back to a 20MA (for example). The bounce is more to do with people jumping on the pullback of a strong move imo, rather than the 20MA, price doesn't seem to bounce off these MA's when the MA's are flat.

I also think the idea from Mr Flibble that people who use them are lazy and not willing to look at the market is ridiculous. People spend huge amounts of time studying bar formations, and they are nto lazy at all. It is just a different way of looking at things.

 

[Splitlink]

As for MA's providing support and resistance. Well on one hand if it bounces off it regularly, you can argue it does. But for me, I don't think they do, but I do think they 'appear' to provide support, since when there is a strong move, the pullback will often come back to a 20MA (for example). The bounce is more to do with people jumping on the pullback of a strong move imo, rather than the 20MA, price doesn't seem to bounce off these MA's when the MA's are flat.

I also think the idea from Mr Flibble that people who use them are lazy and not willing to look at the market is ridiculous. People spend huge amounts of time studying bar formations, and they are nto lazy at all. It is just a different way of looking at things.

MA's provide as much support and resistance as anything else. That has been my point of view for a long time, now. Horizontal lines across the tops? The turning points are just as nebulous and they only become obvious in hindsight. Fib lines are used because of the difficulty of reaching a decision about horizontal lines, so the users come down to a statistical calculation. All this is ok, people can become adept at using their favourite methods. I like MA's.

Trading is a numbers game. That is all it is. We all have our preferred ways of opening trades. When you come down to it any entry system is ridiculous and all we can sensibly use is statistics and experience, of which an important part is a strict "get out" approach whenever anything goes wrong.

 

[Splitlink]

Hi DT,

Your theory throws up some interesting trendlines for the short term trader- This is this morning's FT chart, so you can see that I have an open mind. This a 1 minute chart because I don't trust my tick data

 

[PeterPenrose]

I always like to have a look at the 4 hour time frame to see what it is doing, call me old fashioned ...

Just my 2 pips worth,
Peter.

 

[D70]

A "renko" chart was always an interesting concept to me. Just like the old point & figure. But in the end. A line chart is pretty much all you need. And once you get past that. You'll just need a quote window.

 

[oildaytrader]

I use 15 m time frame , and only use a bar or two bar filter on 15 min, to save me from jumping into trades early.If bars are positive go long , and short for negative bars.I just use them for time filter before jumping in.

1 min and 5 min would be crap.

 

[RIA1]

Wow! Interesting thread...

Regarding t/f's, I often go back 20-25 years.

 

[DionysusToast]

Wow! Interesting thread...

Regarding t/f's, I often go back 20-25 years.

Well - I am day trading... I reckon 25 years is probably overkill for me...

 

[RIA1]

Well - I am day trading... I reckon 25 years is probably overkill for me...

I understand that. I day trade too. Hint: Patterns, patterns, patterns...

 

[Black Swan]

How's about no price? I could profitably trade with one indicator on a chart and no price, any TF, easy peasy lemon...

 

[findlay234]

I was thinking about this a while ago when I was having a look at strats stress free trading techniques and he said that he never ever used the high and low of the candle to create his trends from and always used the close. I can understand this maybe in EOD equity charts but forex it just doesn’t seem to work for me. What if price was had spent some time at a high or low and was moving swiftly up or down when that TF happened to close. This may mean that the close has very little significance.

I think you have to take every indicator lightly, including candles. They show you details about the information but as with any statistic they can be shown in a number of ways. Take the H4 TF. If we kept the TF but shifted it by two hours the charts would tell different things. Some people like their pin bars rejecting S/R. A par of bars joined together could represent a pin bar but if you just look at the candles as they are you wouldn’t see it.

Going to a simple line chart the data points used are closes of small TF’s so this gives the same issues. Could a chart be drawn with time across the bottom, price up the side and a small dot or cross where each trade through the exchange has happened. No lines just a cloud of dots where there is lots of buying a selling and the odd dot high or low that in candle charts could confuse the data. This may not be possible in forex but surely in equities this would show when and where the trades are happening.

BTW, I use candles because it contains data about all trades made not just the last trade in that TF. I use highs/lows/opens/close fairly loosely when looking at trends and S/R. I think more about S/R zones rather than ‘to the point’ values. Well see how it works for me…. Still learning and practicing so no expert.

 

[Savana Jhones]

A "renko" chart was always an interesting concept to me. Just like the old point & figure. But in the end. A line chart is pretty much all you need. And once you get past that. You'll just need a quote window.

This is good to know about this and I must say that, it is worth to figure out. I have no idea of line charts but, as you have posted here that it is good then it must be great.