Time Frames

marky

Active member
104 0
Hi guys, just wanted to know peoples opinions about day trading, i currently trade the YM but found today hard work, not sure if it was, or was it just me, im playing with time frames and want to know if most people stick with the one time frame or change time frames to suite the market conditions, i started moving up frames in order to catch the big moves, but today i would have been better sticking with my old smaller frames.
Regards mark
 

neil

Legendary member
5,167 748
Try using a multiple of five:
For example if you trade off a 1 min bar then use a 5 minute bar for direction. Or if you trade using end of day then use a weekly chart for direction.

Elders book " Come into my trading room" mentions this use of more than one time frame. See Chartmans posts re the Dow - he seems to use 10min bars for direction.

You don't have to trade second by second amid the "noise"....many like to stand away from the noise and trade at a distance where direction etc is more clearly indicated.

Sorry this reply is a bit rushed but the essence is to use a longer time frame for choosing long or short, and a shorter time frame for executing the trade.

Hope this helps.
 

BBB

Experienced member
1,071 3
It all depends on you! Flexibility is the key IMHO. If the smaller time frames aren't liquid enough or too choppy then zoom out to a larger one. What about your life style.

Volatility is key. Is there enough volatility for you to make your money in that time frame?

There is no golden time frame, just as there is no golden anything else in the market.
 

Rognvald

Established member
916 15
Marky

As yuo probably know one of the main proponents of multiple Time frame analysis was the late Robert Krausz who produced the Fibonacci Trader program. Krausz advocated working in 3 time frames. He believed that the shorter should be used for trading with the longer ones used to gain perspective.

Attached are three charts of SMI – 60 min, 10 Min and 2 min which I look at from time to time and which might form the basis for some discussion - would you like to comment on what you might have done in recent days trading and why?

These charts were drawn today for the avoidance of doubt :)
 

Attachments

  • doc2.doc
    138.5 KB · Views: 501

sandpiper

Well-known member
458 54
Rognvald,

Unfortunately Robert never (to my knowledge anyway) did any detailed analysis of multiple timeframe trading using simple price action alone. Although his Gann swing trading plans/systems come the closest (imo), most of the rest of his work, including all the free journals on www.fibonaccitrader.com (as highlighted by BigBusiness previously) focus on indicators derived from price.

Not familiar with SMI but I'll have a look at your charts after I've read that other post that you kindly pointed out.
 

sandpiper

Well-known member
458 54
Rognvald,

OK. As I said I'm not familiar with SMI or it's "personality" and I wouldn't normally comment on stuff that I haven't looked at. However, simply for the sake of discussion:

Firstly, my longest time-frame chart would be a daily chart. I would use this to determine both overall trend (or lack of it) and major support & resistance.

I wouldn't use two minutes for trading since it would give me a headache (but that's just personal choice). Also, looking at your 2 minute chart, it doesn't "shape up" particularly well. By that I mean it doesn't look to either congest or swing well viewed in two minute bars. I can't get any intra-day data up on smi so I can't have a decent look to observe what 2 minute charts look like over the longer term. You are obviously familiar with it, so it probably "shapes up" fine to you.

My preference would be to use your 10 minute chart for trade entries since that seems to "form" better patterns, i.e. swings and congestions.

Which leaves the 60 minute as an intermediary time-frame/reference. I would use this mainly to derive short - medium term support / resistance.

So, back to your original point, i.e. how to use them all together.

Firstly I would look to the daily chart to establish some context.

1) SMI recently broke out above the triple top @5145.
2) Fourth time through is a low risk trade anyway but combined with the slingshot/rising bottoms pattern below 5145 a long in
anticipation of breakthough looked particluarly low risk.

I realise that you were asking about the last couple of days and the breakout took place in December and so is not relevant from a trading perspective looking back over the past few days. It was significant and worth a mention though.

OK. Last few days then. Well again, looking at the daily chart, the breakout (for me anyway) would have established an UPTREND. Normally, were Mondays low at 5496 to be taken out then I would consider smi back in a downtrend. However, with clear support the triple/quad top I would wait for that to be clearly breached before assuming a trend reversal.

So Monday, was day two of a pull-back in an uptrend. Any shorts taken would be counter-trend trades and treated accordingly with smaller position size (if taken at all). Any longs would have been trading with the trend and treated accordingly with full position size.

I would be looking at the 10 minute chart on Monday for a long entry with the trend. Since Monday was essentially a down day in an up-trend that, for me, means looking for a reversal pattern intra-day on the 10 minute chart, i.e. either a double bottom or a 1-2-3 bottom.

As it happens, a 1-2-3 bottom looks as if it was formed when the gap fill (from 5508-5461) failed so that would have got me long. I'm sure there were opportunities to trade short using a 2 minute chart, just not for me. And, as I said, any shorts would be counter-trend trades.

My plan with this trade would be to hold the trade in anticipation of a break of the intra-day high (i.e. up-trend continuance) at which point I would get rid of some.

On Tuesday I would again be mainly looking for longs. I might get rid of my long held overnight if there was an intr-day trend reversal pattern, i.e. double top or 1-2-3 top. Otherwise I would be holding it. Looking at the 10 min chart for Tuesday it looks as though there was an intra-day double top (getting me out of the long). Might have been short, might not. Can't say. I'm not very good on counter-trend moves so I probably wouldn't have been.

Wednesday saw an intr-day 1-2-3 bottom pattern from at the open which would have provided the opportunity for a long with the longer time-frame trend (still UP). The immediate target for any long would be Tuesday's high, at which point I would take some off and carry the rest again overnight.

So, for the sake of discussion, that shows a very simple form of multiple time-frame trading.

I didn't mention the 60 minute chart because when I actually looked at it didn't give me any extra information. Sometimes they do, sometimes they don't. Nor did I include any daily support resistance other than previous days high/low.

I could (and normally would) use daily closes and weekly highs/lows for example.
 

marky

Active member
104 0
Hi Guys, and thanks for the replies and the links, i hope to have solve my problem now concerning time frames.
Regards mark
 
 
AdBlock Detected

We get it, advertisements are annoying!

But it's thanks to our sponsors that access to Trade2Win remains free for all. By viewing our ads you help us pay our bills, so please support the site and disable your AdBlocker.

I've Disabled AdBlock