Which Timeframe Has The Most Power

[pennye]

Hi I'm a wannabe end of day currency trader using a "look once a day, multiple time frame" system and I'd like some opinions on the different time frames.

I'm thinking that the Weekly time frame is the dominant one ATM, but then there's the Monthly time frame saying different things, and the 8hr is in there as well putting some pressure on me to change my mind.

Using the Daily as my first time frame, which is the best second and third? Do I even need a third? Do I need four or five?

Any and all opinions are welcome...

 

[tomorton]

I am trading forex using weekly and daily charts to determine trend and trend strength, dailies to determine entries, though I try to only make entries at EOD (London session). I won't use monthly charts as I am never in a trade that long, they either hit target or stop or (rarely) I will close them manually if they're not performing.

Its inevitably going to be confusing if you use multiple TFs but worth having a look at Captain Currency's 3 Little Ducks system which uses 3 in a logical complementary way.

 

[spinola]

You need what you feel you need. No point other people guiding you in that department , as it may waste your time, ultimately, with trying to fit other peoples ' fitted to them ' approach.

I'd say expose yourself for 12 months, and see where you end up.

 

[pennye]

I am trading forex using weekly and daily charts to determine trend and trend strength, dailies to determine entries, though I try to only make entries at EOD (London session). I won't use monthly charts as I am never in a trade that long, they either hit target or stop or (rarely) I will close them manually if they're not performing.

Its inevitably going to be confusing if you use multiple TFs but worth having a look at Captain Currency's 3 Little Ducks system which uses 3 in a logical complementary way.

Thanks for that. I'll take a look.

And why do you use London end of day, and not US end of day? If you don't mind my asking.

 

[tomorton]

London is the major market for forex.

 

[pennye]

London is the major market for forex.

Thanks again. I've never thought of it like that before.

 

[Forexmospherian]

You may also need to think out the box here.

Think trading efficiency and Risk / Reward more if you trade to make money rather than as an hobby.

If you will always remain part time and cannot dedicate at least 3- 5 hrs per day in the European / early US am session - then you will be using the higher ( inefficient and less accurate ) frames

Trading is a like a big jigsaw puzzle - it can be solved to a fair degree - but if you stay with the 50 piece puzzle and not tackle the 1000 + piece - you will be limited

Good Trading

F

 

[Fugazsy]

this is is only my view and my perception and I intend not to offend anyone, I am only sharing:

Trading above the 5m is not trading it is only guessing, the shorter time frame is more predictable, I have a greater chance to know what will happen in the next 10 minutes than what will happen in the next couple of days, outside variables will come to play and anything can happen, of course been able to read the 5m tf is more difficult, we need to specialise in it and it may take more time than you think before it is mastered, not only technique and an understand of market structured is required, but you also need to know a bit more about yourself and find a way that relates to your own personality, which is most difficult part.....

I trade the 1m TF.

 

[tomorton]

this is is only my view and my perception and I intend not to offend anyone, I am only sharing:

Trading above the 5m is not trading it is only guessing, the shorter time frame is more predictable, I have a greater chance to know what will happen in the next 10 minutes than what will happen in the next couple of days, outside variables will come to play and anything can happen, of course been able to read the 5m tf is more difficult, we need to specialise in it and it may take more time than you think before it is mastered, not only technique and an understand of market structured is required, but you also need to know a bit more about yourself and find a way that relates to your own personality, which is most difficult part.....

I trade the 1m TF.

I don't doubt that you can trade on such a short TF, but my advice to newcomers to trading is - steer clear of TFs measured in minutes or you will be broke within hours.

 

[pennye]

this is is only my view and my perception and I intend not to offend anyone, I am only sharing:

Trading above the 5m is not trading it is only guessing, the shorter time frame is more predictable, I have a greater chance to know what will happen in the next 10 minutes than what will happen in the next couple of days, outside variables will come to play and anything can happen, of course been able to read the 5m tf is more difficult, we need to specialise in it and it may take more time than you think before it is mastered, not only technique and an understand of market structured is required, but you also need to know a bit more about yourself and find a way that relates to your own personality, which is most difficult part.....

I trade the 1m TF.

So you're using the 5 min for direction and the 1 min for entry?

 

[Fugazsy]

So you're using the 5 min for direction and the 1 min for entry?

no....support and resistance are also clear on the 1m TF, I do not believe the myth that you need to view the bigger TF for direction, but having it open as well as the 1m tf it may also help, many traders are using the 5m TF and how it end will give many clues.... many times you see a break of a TL with a bull trend bar in the first few minutes (in a bear), but in the last 10-20 seconds closes at his low (which is good at least for a scalp), trapping the bulls with a false break, most of the trapped traders have entered prematurely on the 1m TF on the long side...

 

[Fugazsy]

I don't doubt that you can trade on such a short TF, but my advice to newcomers to trading is - steer clear of TFs measured in minutes or you will be broke within hours.

well I agree with you, but newcomers need to apply caution till they double their small account (or demo, but I do not advise a demo because Mr Egos does not come to play, best is to trade very small, you can open an account with $10 and take only 1% risk per trade) .......the convenience of learning the smaller TF is that you will lear quickly, spending 4 hours a day on the 5m on one instrument (very important, they all act differently and focusing on one instrument it is vital, needs be known inside out), will give enough points to understand the potential to reach a target that is the same or greater than your risk.

Myself every day after the session closes, I go back and move the chart forward from the beginning bar by bar to see what I could have done better and when and how I was reading wrongly, if you do that for a couple month every day, it will pay off....of course it is hard work....but all good things comes with hard work....

I doubt one day I will stop doing my homework after my session, if I do I will not be "there" because the market as life always changes and once I stop learning I will not be up to it..

 

[fxstrategist]

We should learn how to use all the timeframes, because they all have a different purpose. For longer term trading the higher time frames are better, and for scalping the smaller time frames are better, but all types of traders should learn how to interpret all timeframes.