Questions from a beginner

bsk6969

Junior member
19 0
Howdy everyone! I've only been paper trading on Ninja the past month, but would like to pose a few questions:
1. What are going to be the big differences in indicators that you can find for free and ones that people charge for?

2. Can someone please explain to me how 1 or 2min charts are used in tandem with 5-, 10- or even 15 minute charts? Confirmation of a trend? Exit points? Etc...?

Thanx for any feedback.
 
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member275544

0 0
Howdy everyone! I've only been paper trading on Ninja the past month, but would like to pose a few questions:
1. What are going to be the big differences in indicators that you can find for free and ones that people charge for?
2. Can someone please explain to me how 1 or 2min charts are used in tandem with 5-, 10- or even 15 minute charts? Confirmation of a trend? Exit points? Etc...?

Thanx for any feedback.

1) Paid for indicators will generally be more pleasing on the eye. That's about it. They may well have been optimised and will generally be a combination of others. Anybody can make an indicator look good.
2) well if a trend is ending on a 1 minute, you have an early exit on the 5 minute, likewise a potential entry. I only ever exit from the lower timeframe however...thats just me
 

bsk6969

Junior member
19 0
1) Paid for indicators will generally be more pleasing on the eye. That's about it. They may well have been optimised and will generally be a combination of others. Anybody can make an indicator look good.
2) well if a trend is ending on a 1 minute, you have an early exit on the 5 minute, likewise a potential entry. I only ever exit from the lower timeframe however...thats just me

Ok, let me ask you...For intraday trading, what time frame do you find most profitable and why do you think that is? 1-min? 3-, 5- 15-min?I can see 1-min charts being full of a lot of noise and have had some success (sim) even moving up to 2-min charts, but I'm curious if moving up to 5-min charts or higher wouldn't smooth out some of the trend to where the trend itself isn't as evident or quickly caught if you're watching a 15 minute chart. Or is that exactly the point to using several different time charts at once?
 
M

member275544

0 0
Ok, let me ask you...For intraday trading, what time frame do you find most profitable and why do you think that is? 1-min? 3-, 5- 15-min?I can see 1-min charts being full of a lot of noise and have had some success (sim) even moving up to 2-min charts, but I'm curious if moving up to 5-min charts or higher wouldn't smooth out some of the trend to where the trend itself isn't as evident or quickly caught if you're watching a 15 minute chart. Or is that exactly the point to using several different time charts at once?

I don't trade off time based charts
 

wackypete2

Legendary member
10,229 2,054
Ok, let me ask you...For intraday trading, what time frame do you find most profitable and why do you think that is? 1-min? 3-, 5- 15-min?I can see 1-min charts being full of a lot of noise and have had some success (sim) even moving up to 2-min charts, but I'm curious if moving up to 5-min charts or higher wouldn't smooth out some of the trend to where the trend itself isn't as evident or quickly caught if you're watching a 15 minute chart. Or is that exactly the point to using several different time charts at once?

Any time frame can be profitable. Your profitability depends on your money management and leverage used. The higher time charts will give you more pips per win or loss but fewer trades and generally smaller $/per pip for each trade. Obviously then smaller time frames will give you fewer pips per win or loss and generally higher $ per pip for each trade.

Since you're a beginner my advice to you is to stay away from 1m charts and even 5m charts until you are proficient. Opportunity to learn comes from your losing trades. Along with the noise small time charts are too fast to stop, analyze, and learn what you need to do better.

You need PATIENCE. If you are using the 1m and 5m charts because you like the action or do not want to be bored then you will almost certainly never get to a better stage.

Peter
 

strokey tone

Member
73 1
Do you really want to be part of this bent betting shop called the Stock Market?
Regulators on two continents have noticed that too much trading in stocks takes place out of sight.
Tomorrow, European finance ministers plan to endorse legislation that would force transactions in privately owned venues known as dark pools into an organized trading system. Meanwhile in the U.S., the Financial Industry Regulatory Authority, the brokerage industry’s self-regulator, sent letters last month to 15 firms, seeking information on how they police their dark pools and what they disclose to customers.
The proliferation and growth of dark pools should concern anyone who buys or sells shares, not to mention workers whose retirement accounts hold stocks in mutual funds. Evidence is mounting that trading in dark pools increases the odds that buyers and sellers won’t easily find each other, so investors can lose out on the best possible prices.
The companies that own dark pools haven’t exactly made it easy to figure out what happens on their private trading systems: Credit Suisse Group AG, whose Crossfinder service is the biggest U.S. dark pool, in April stopped reporting the number of transactions it processes. About a dozen other dark pools already keep mum about their trading, and there is nothing to stop the rest from joining the silence. This would further obscure the transparency that has helped make American capital markets the most appealing in the world.
Dark pools arose in the 1980s when the Securities and Exchange Commission said brokers could bring together buyers and sellers to trade anonymously. Rather than routing customer orders to the traditional exchanges, brokers could send them to an outside trading service or execute orders on their own internal systems, pocketing the spreads on prices and trading fees. Today, as much as 40 percent of trading in U.S. equities takes place away from the public stock exchanges.
Explosive Growth
Not surprisingly, trading on dark pools and brokers’ internal trading systems has exploded in recent years. Most of the increase has come at the expense of U.S. stock exchanges, where volume has fallen more than 30 percent in the past three years, according to data compiled by Bloomberg. There even are signs that dark pools are picking up the business of small investors, based on research that shows the average dark-pool transaction involves just 200 shares.
To their credit, dark pools have forced the stock exchanges to be more competitive through technological innovation. But the growth of dark pools also reflects the higher operating and compliance costs of their heavily regulated exchange rivals, an obvious benefit for firms such as Goldman Sachs Group Inc., UBS AG and Barclays Plc, which own three of the five largest private trading services.
All this fragmentation means that buyers and sellers aren’t meeting in a central location where information is shared, endangering the price-discovery function on which efficient markets depend.
The SEC, however, doesn’t have the authority to oversee dark pools the way it does exchanges, which have public-utility-like obligations. Exchanges match supply and demand, make buy and sell quotes publicly available, post trading prices, and police their markets for fraud and insider trading.
Dark pools, by contrast, essentially piggyback, at minimal cost, on quotes set by the New York Stock Exchange (NYX), the Nasdaq Stock Market or the U.S.’s 11 other stock exchanges. The dark pools are under no obligation to provide data that the broad market uses for price discovery. What information they do make available tends to fail the fairness test: Price quotes are sometimes sent to select investors, giving them an unfair advantage. Regulators are also concerned that high-frequency traders are placing orders on the open exchanges in order to influence prices in dark pools to their advantage.
Public Service
If this were only a dispute between commercial interests, we could leave the exchanges to duke it out with the dark pools. The reality is that exchanges provide a public service. In the U.S., legislators recognized this in the 1930s, when the first laws governing exchanges and protecting investors were adopted. (Bloomberg LP, parent of Bloomberg News, owns a stake in a company, Bids Trading LP, which operates a dark pool.)
Although Europe’s regulators are pursuing one remedy, Canada might serve as a better model for the U.S. Last year, Canada required dark pools either to offer a superior price to that of the exchanges or to limit trading to large blocks of shares. Since then, buy-and-sell spreads have narrowed by 25 percent, and sharp price swings have declined.
Were the U.S. to adopt a price-improvement rule it might limit the ability of dark pools to leech off the quotes the exchanges generate at great expense.
Regulators should also consider restricting or banning the practice of sharing data with select clients, or require broad quote dissemination. Finra must also be more vigilant amid signs that dark pools have shared clues about customer trading intentions with proprietary traders working for the Wall Street firms that own some of the dark pools.
Dark pools aren’t going away. Regulators need to ensure that their further growth doesn’t cause unacceptable harm to U.S. financial markets.
To contact the Bloomberg View editorial board: [email protected].
 
M

member275544

0 0
Can you elaborate? If you don't trade off time based charts, does that mean you rely more on volume or momentum or some other indicator? Or maybe fundamentals?

none of the above, I use possibly the oldest form of charting in the western world
Point and Figure. It is not interested that price moved say 50 points in an hour, only that it moved 50 points. It might have been in 5 minutes, it may have taken it a week. If it doesn't move, it doesn't get recorded.
 

bsk6969

Junior member
19 0
none of the above, I use possibly the oldest form of charting in the western world
Point and Figure. It is not interested that price moved say 50 points in an hour, only that it moved 50 points. It might have been in 5 minutes, it may have taken it a week. If it doesn't move, it doesn't get recorded.

So if you're not concerned with how long a move might have taken, likewise, when you place your order, you're not concerned with how long it may take to reach a profit target?
 
M

member275544

0 0
So if you're not concerned with how long a move might have taken, likewise, when you place your order, you're not concerned with how long it may take to reach a profit target?

absolutely correct. I will either reach my target, or I exit when the price reaches a certain point. Anything in between is noise and doesn't get recorded
 

bsk6969

Junior member
19 0
absolutely correct. I will either reach my target, or I exit when the price reaches a certain point. Anything in between is noise and doesn't get recorded

Hmm. Interesting.
Ok, a few other questions for efveryone...
1. What are the 3 best markets for volatility and liquidity?

2. I've been reading how important volume is, that volume always precedes price. Is a simple volume indiator all I need or is there something better? Also, volume will still spike up for a downtrend, right? Lagging volume would mean a ranging market, neither going up or down, correct?

3. Which is better for figuring support and resistance - drawing my own channel lines by connecting the peaks/valleys, or maybe using the bollinger bands, or is there something better?

4. Which indicators are best to watch for divergence with price? MACD? MFI? Something else? And how far back does divergence become irrelevant if using 1 or 2-min charts? Also, does is matter how close/far apart the peaks (or valleys) are, when watching for divergence?
 

wackypete2

Legendary member
10,229 2,054
3. Which is better for figuring support and resistance - drawing my own channel lines by connecting the peaks/valleys, or maybe using the bollinger bands, or is there something better?

Bollinger Bands are a measure of volatility. Please don't use them as support or resistance levels since that's not what they are telling you.

4. And how far back does divergence become irrelevant if using 1 or 2-min charts?

1 or 2 minutes ago. Seriously. See my previous post.

Peter
 

Hakuna Matata

Well-known member
357 209
Hello.

It is not really condusive to success to think in terms like "is this better than that" or "what is best for this?".

Explore with whatever feels natural to you. At some point, you will think that you've "cracked it", get all excited, only to find that the fruits of your efforts are not what you expected, and feel that you are back at square one.

It this process of: exploring -> learning -> trying -> failing that - in time - will help you build an experience of how you believe markets to operate, and how to design a trading strategy to exploit them.

So just do what feels natural, and don't be afraid of failing.
 
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bsk6969

Junior member
19 0
Hello.

It is not really condusive to success to think in terms like "is this better than that" or "what is best for this?".

Explore with whatever feels natural to you. At some point, you will think that you've "cracked it", get all excited, only to find that the fruits of your efforts are not what you expected, and feel that you are back at square one.

It this process of: exploring -> learning -> trying -> failing that - in time - will help you build an experience of how you believe markets to operate, and how to design a trading strategy to exploit them.

So just do what feels natural, and don't be afraid of failing.

Thank you. I needed that reminder that I'm exploring and figuring things out, not seconds away from stumbling across the best secret to trading! I get a bit caught up as I'm moving forward. So thanx again for the insight.
 
 
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