Timeframe paradox.

[hybrid]

I'm seeking some sort of wise reply to this paradox.

They say to have an "anchor timeframe," one main TF that suits ones life and trading style.....but to search for entries and exits in the next lower TF. This all makes alot of sense.

But, say I use DAILY as an anchor and 4H as entry/exit.....oftentimes signals look great in the DAILY and then inversed in the 4H. This is the same if one shifts down to 4H as anchor and 1H for more info: e.g. the 4H says buy, but the 1H says sell.

Also on the first TF I mentioned (DAILY anchor, 4H entry/exit), if one peaks at the WEEKLY it all goes nuts again.

What I am asking is, is it not better to just stick to one TF and not to look at any others, to keep it simple?

Obviously the markets are cycles within cycles, fractals within fractals, so surely best to just pick one cycle/fractal - and get to know it?

On another note, many say beginners should start on the DAILY (decent S&R levels that many people look at), but to place a sensible stop loss is a risk of alot of pips.

thx for your time reading this.

 

[Trader333]

In my view the obvious answer is to not take trades that are not aligned in direction in both chosen time frames.

 

[Giovan]

Use the Daily TF for trend general identification and wait for corrections on the H4. As trader333 said, trade with the trend.

 

[Traderallen]

The reason why this seems difficult to understand because it doesn't work. It is repeated over and over many book writers and not traders. Depending on the method you are planning on using, although it doesn't really matter too much assuming since you are looking at the daily chart. I'm assuming you're going to trading for a few days or more so I would further assume that you're doing some kind of trend trade. Therefore you should start looking at the daily weekly monthly charts for trend direction. Then wait for the inevitable pullback on say the hourly chart to look for an entry point. Assuming again that you are going to be trading Forex. Realize that is a very volatile market and going to be very difficult to trade long-term using any method. Beware of the books and webinars. It's vital to understand most so-called teaching is being done by people who never made a dime trading the market.

 

[darktone]

In my view the obvious answer is to not take trades that are not aligned in direction in both chosen time frames.

what Trader333 said

Id add:
If your looking at the daily for overall direction id suggest you look at keeping the trading time frame at an hour or less. 4hr seems a little big imo and might be better suited for weekly direction.

 

[hungcable]

I'm seeking some sort of wise reply to this paradox.

Ha, what makes sense to one person may not make sense to you (discretionary)

They say to have an "anchor timeframe," one main TF that suits ones life and trading style.....but to search for entries and exits in the next lower TF. This all makes alot of sense.

You're working with volatility as a trader - use limits - forget thinking about timeframe so much

But, say I use DAILY as an anchor and 4H as entry/exit.....oftentimes signals look great in the DAILY and then inversed in the 4H. This is the same if one shifts down to 4H as anchor and 1H for more info: e.g. the 4H says buy, but the 1H says sell.

You very mixed up - don't put any real money on the line

Also on the first TF I mentioned (DAILY anchor, 4H entry/exit), if one peaks at the WEEKLY it all goes nuts again.

What I am asking is, is it not better to just stick to one TF and not to look at any others, to keep it simple?

Then you have no perspective

Obviously the markets are cycles within cycles, fractals within fractals, so surely best to just pick one cycle/fractal - and get to know it?

As above. Also volatility changes

On another note, many say beginners should start on the DAILY (decent S&R levels that many people look at), but to place a sensible stop loss is a risk of alot of pips.

Simple mathematics

thx for your time reading this.

no probs

 

[0007]

Obviously the markets are cycles within cycles, ..........

You've identified the most important point and this is the key to your question. Different timeframes are useful in identifying the phases of any cycles present (don't get confused by the noise which is largely meaningless). It has already been pointed out that ideally you want to trade when all the cycles are in phase which effectively means the trend at that particular moment is going in a particular direction. It can be very confusing at first to see apparently (the paradox?) different things happening in different timeframes where in reality you are just looking from different viewpoints at one dynamic thing. Once you understand this properly it can be used to your profitable advantage.

 

[barjon]

.................. It has already been pointed out that ideally you want to trade when all the cycles are in phase which effectively means the trend at that particular moment is going in a particular direction..........

Depends on your strategy, surely? I trade potential trend continuation after retracement. That means I'm usually looking at daily up trend, H1 down trend - the retracement, M5 up trend - coming out of retracement. Mind you, I suppose if you extended back far enough on each of the lower time frames everything would indeed be pointing in the same direction.

 

[0007]

Depends on your strategy, surely? I trade potential trend continuation after retracement. That means I'm usually looking at daily up trend, H1 down trend - the retracement, M5 up trend - coming out of retracement. Mind you, I suppose if you extended back far enough on each of the lower time frames everything would indeed be pointing in the same direction.

I think that's an effective way of using the information which probably requires a more sophisticated approach. What is remarkable is that where cycles can be correctly identified they do reflect the reality of price movement more often than not. In the case you quote it ought to be possible to see the retracement reflected in short term cycles -- though M5 is a bit on the short side for me!

 

[hybrid]

Thanks for all the replies - this thread has helped me alot.