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jimbil Jul 11, 2007 8:49am | Post# 1

Timeframe - bottom line $ profit/loss

If a trader were to switch from trading a strategy on lets say a 60min chart, to trading basically the same approach on daily charts, they will likely need to adjust their max. SL size, and trade/stake size.

Because their profitable trades on 1440min charts, will catch more pips/points than on the 60m charts, at first sight, one might expect overall profit levels of each individual trade to be around the same levels, regardless of timeframe.

Sometimes, on a 60m chart, a strategy can be racking up a series of losses, but on a 240m chart at the same time, the strategy may have been in one single profitable trade for the duration etc......

So lets say you switched from trading eg. USDCHF on a 60m chart, to trading basically the same approach on a daily chart, adjusting maximum SL size, stake size, and baring in mind profitable trades will catch more pips. Over the duration (of lets say 2 months or more), can one expect to attain the same level of $ profit levels?

At first sight, i would say it would be possible, to attain the same level of profit per instrument traded, because the same $ profit level per trade, should be fairly even, when still only risking the same 1%-2% capital per trade.
But then you also need to consider the consequence of fewer trades within a space of say 2 months, on the daily charts.
But then as i mentioned, while a 60m chart might be racking up a series of losses, a 240m chart can be in one profitable trade......

There seems a lot of variables in play here that might affect bottom line $ profit levels, and gaging this does not seem easy.

If switching from say 60m to 1440m, due to there being less trrades per instrument on the higher timeframes, would the only way to be able to attain similar bottom line $ profit levels be to trade more than one instrument at the same time (whereas on the 60m chart you only needed to trade the one instrument to attain that level of bottom line $ profits)?

Has anyone gained experience of drastically increasing timeframe from something like 60m to 1440m on an instrument, but basically trading the same strategy with different parameters?
If so, what effect did it have on your overall bottom line $ profit levels?

Many thanks.

jimbil Jul 11, 2007 9:25am | Post# 2

If trading from 60m charts, you can tally up $ profit/loss at the end of the day or week.
If trading from daily charts, you need to tally up $ profit/loss over maybe a month or more.
If trading from weekly charts, you need to tally up $ profit/loss over maybe a year or more.

But what i am getting at is, at the end of that day/week/month/year, regardless of timeframe, should $ profit/loss per single instrument traded, average out at around the same $ profit/loss level for each day/week/month etc. of the period covered?

Therefore if you trade GBPCHF on 60m charts, and make 300 pips per month, using 40 pip SL's. If you increase timeframe (to 120m, 240m, 480m, 1440m etc.) and adjust your numeric paramters (SL, trade stake size) accordingly, should you still be able to make the same $ profit level as you were making when trading GBPCHF on 60m charts, and make 300 pips per month, using 40 pip SL's?

Or does the fewer trade signals on the longer timeframe mean that in order to achieve the same profit levels that you attained on 60m charts, you will now need to trade multiple instruments/pairs consecutively?


jimbil Jul 11, 2007 9:59am | Post# 3

It is a difficult one, and maybe the only way of knowing for sure is to have made the switch to a much higher timeframe for yourself.

I suspect that to get close to achieving the same level of overall $ profits that is possible trading only one instruments/ccy pair on 60m charts, if trading from 1440m charts, one needs to trade multiple instruments/pairs simultaneously.............due to the lesser number of trades on the higher timeframe, meaning the process of compounding any profits would also be slower, and fewer and further between due to there being less trades on the higher timeframe/s...
How many pairs "multiple" pairs equates to, i am not quite sure!

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