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Attachments: Preferred Timeframe for Trading
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Preferred Timeframe for Trading

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  • Which timeframe you trade on? (if multiple then select multiple)
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  • Post #1
  • Quote
  • First Post: Edited Sep 21, 2014 12:23pm Sep 12, 2014 3:27am | Edited Sep 21, 2014 12:23pm
The market is a continuous stream of bid/ask prices, however because its fractal nature, it is divided into timeframes to help us group the price by the duration we choose, and not only that, it also filters the noise out.

Then it becomes question of choice which timeframe you choose, and the scalpers may choose lower timeframes, where they put quick trades, with low accuracy, or the swing traders who put high accuracy trades, put few of them and infrequent, and of course anything in-between.


So my question to you, and the subject of this thread is:

  1. Why did you choose the timeframe you choose (some explanation or logic behind your choice) and
  2. Which one is it ?


Also if you trade on multiple timeframes, then also i would like to hear your logic why you choose it.

Let's debate this subject because i think its a pretty interesting one and many traders could share their opinions about it

"There's a sucker born every minute" - P.T. Barnum
Ok let me share my opinions, i prefer the H1 chart because it resembles clearly the daily picture but if there is a news event upcoming, it is just more clearly visible if i shrink down to M15, so that the initial impact on the market can be observed better.

Now it may show whipsaws better, but for placing trades its a precise one.

Also for carry trade/swing trade i would prefer D1 and W1 timeframes, so i have 4 preferred ones.
"There's a sucker born every minute" - P.T. Barnum
You should ask yourself a very basic question ... what do you trade? ... a time? ... or ... the price?
If your answer is ... the price ... or some price level, then why to constrain yourself to viewing that price through any time-frames.
(as the price has nothing to do with a time ... it moves upwards or downwards without any time restrictions whatsoever)
So, one minute candle/bar can (potentially) have an exactly the same price range as daily or even weekly or monthly candle/bar.
Thus, ... are you going to open a trade ... because the price has moved by 10-pips over some period of time?
... or perhaps because it has reached a specific price level, which you're expecting to hold or fail?
So,my personal take on this subject is very simple and quite effective ... Constant Range Bars (occasionally also called as Momentum Bars)
... developed by Vicente M. Nicolellis Jr. nearly two decades ago.
10 pips constant range bars. 10 pips ~ average volatility of the majors over one hour. CRB also break down sharp moves into several bars. Then MTF by doubling the range.
No greed. No fear. Just maths.
Quoting DareXau
what do you trade? ... a time? ... or ... the price?
Both, because you dont trade only the price you put the order in, but the price you get your order out, so that is called a price flow

And the price flow is a function of both price and time

Price charts like renko are flawed in my opinion, or atleast should not be used alone, because the price change/time, also known as acceleration can determine the volatility.

Whereas if you only looked at price charts you miss some key information about incoming volatility in a news event or similar.
"There's a sucker born every minute" - P.T. Barnum
If one has his system/strategy..............................
........with specialised MM it should work on every TF
Volatility and acceleration are two distinct things.

Renko are not flawed because of the time dimension removal (they are designed to do so). Renko are flawed because they are biased on the trend: you need N pips move to get a new bar of the same color but 2N pips to get an opposite color.

CRB and renko are very different. You needn't determine the volatility of the CRB chart since it is fixed and already known (that's the range).
No greed. No fear. Just maths.
Quoting PipMeUp
Volatility and acceleration are two distinct things. Renko are not flawed because of the time dimension removal (they are designed to do so). Renko are flawed because they are biased on the trend: you need N pips move to get a new bar of the same color but 2N pips to get an opposite color. CRB and renko are very different. You needn't determine the volatility of the CRB chart since it is fixed and already known (that's the range).
Acceleration causes volatility, i didnt said that they are identical, when the market accelerates up, then it will most likely be followed by whipsaws.

A not accelerating constant market has a very low volatility which is called consolidation in forex language.

The removal of the time dimension is the problem not the renko itself, because for an acceleration detection you need the time dimension.

I never heard of the CRB charts, but i`ll look into it, it seems interesting for a filter purpose.
"There's a sucker born every minute" - P.T. Barnum
Quoting Jysticim
If one has his system/strategy.............................. ........with specialised MM it should work on every TF
Not really, you cant carry trade on M1 timeframe

You can put the trade on by looking at M1, but usually for carry you need a longer term picture so, below H4 its probably not worth it.

Also how can you mix scalping strategies of low TF with swing trading in high timeframe.

So its totally not true.
"There's a sucker born every minute" - P.T. Barnum
Hello,

According to french scientist, the structure of every markets is the same on every time-frame.

Here is a video "probabilities and brownien movement" in french (sorry):


http://www.canal-u.tv/video/universi..._brownien.1030
Bottomless wonders spring from simple rules, which are repeated without end
Quoting limprobable
Hello, According to french scientist, the structure of every markets is the same on every time-frame. Here is a video "probabilities and brownien movement" in french (sorry): http://www.canal-u.tv/video/universi..._brownien.1030
Thats not true, not even the distribution of the real movement is the same between all TF because HFT generated price moves are totally different than those from large investors planning on Quarterly trades.

And also the noise whatever distribution it may have, the size of the noise itself is much smaller on high timeframes.

In basic terms, the price makes smooth and big swings on high timeframes, and choppy consolidated moves on low TF.
"There's a sucker born every minute" - P.T. Barnum
Quoting Proximus
Not really, you cant carry trade on M1 timeframe
Yes you can! AFAIK Oanda calculates the swap by the second.
No greed. No fear. Just maths.
  • Post #13
  • Quote
  • Edited 8:17am Sep 12, 2014 7:49am | Edited 8:17am
Quoting PipMeUp
10 pips constant range bars. 10 pips ~ average volatility of the majors over one hour. CRB also break down sharp moves into several bars. Then MTF by doubling the range.
CRB's are breaking down any sharp moves into several bars ... that's correct and very true (as a trader you should expect some re-action to any price movement)
So, what's wrong with this ...???
In my opinion ... there is nothing wrong or odd ... it's just a pure price action / re-action ... and it's how the forex-market or any 'trade-able' market works ...
YOU ... see the price ... and ... YOU make a decision about it ... to ... BUY or SELL ... or to wait for some other indication.
However, I don't see any reason for waiting until any particular candle/bar may close or not ... which is a basic principle while trading with any time-frames ...
... isn't it???
Quoting DareXau
{quote} CRB's are breaking down any sharp moves into several bars ... that's correct and very true (as a trader you should expect some re-action to any price movement) So, what's wrong with this ...??? In my opinion ... there is nothing wrong or odd ... it's just a pure price action / re-action ... and it's how the forex-market or any 'trade-able' market works ... YOU ... see the price ... and ... YOU make a decision about it ... to ... BUY or SELL ... or to wait for some other indication. However, I don't see any reason for waiting until any particular...
Nothing is wrong. I consider it an advantage. I also like its statisitcal behavior. 10 pips RBC was my answer to the thread question "Preferred Timeframe of Trading?"
No greed. No fear. Just maths.
Quoting PipMeUp
{quote} Yes you can! AFAIK Oanda calculates the swap by the second.
How is that possible,when the swap rate depends on the base price and the respective forward prices

http://en.wikipedia.org/wiki/Foreign_exchange_swap

http://upload.wikimedia.org/math/9/b...7f4d725d08.png
where

  1. F = forward rate
  2. S = spot rate
  3. rd = simple interest rate of the term currency
  4. rf = simple interest rate of the base currency
  5. T = tenor (calculated according to the appropriate day count convention)

the simple overnight interest rates are published by respective CB every day, while the T time is 1 day, however the forward and spot rates are unknown ahead, so, they probably have custom swaps, as they are themselves market makers too.



But i dont think their swap is representative of the interbank swap rate, and can give false images to carry traders, because the market will most likely go toward the interbank swap rates.

So for example if the NZD/JPY has a 4.6 pip swap on my broker, but lets say if the interbank swaps are -1 pip, then the big boys who carry trade are most likely selling the NZD and hedging on other pairs, while me like a fool would buy it just because my broker would give 4.6 pip.

So if anyone is a good carry trader here , should probably know this, that the interbank swaps are the real ones not the local broker swaps

"There's a sucker born every minute" - P.T. Barnum
Quoting PipMeUp
{quote} Nothing is wrong. I consider it an advantage. I also like its statisitcal behavior. 10 pips RBC was my answer to the thread question "Preferred Timeframe of Trading?"
Thank you for your contribution at: (http://www.forexfactory.com/showthread.php?t=481691) ... unfortunately it didn't pick-up "the right audience" ... I gues.
... and frankly, I've missed it too at that time ... as I'm not a frequent / devoted member of ForexFactory
... who mostly is browsing through, whenever has some spare time to kill (in between the trades)
Anyway, It's good to see ... that not only me alone are looking into a different 'price-structure' ... and trying to get it from different angle.
Anyone else wants to share his thoughts about timeframes?
"There's a sucker born every minute" - P.T. Barnum
Quoting Proximus
Anyone else wants to share his thoughts about timeframes?
I trade 5m or 15m though im still struggling with it.
Quoting faststare08
{quote} I trade 5m or 15m though im still struggling with it.
Maybe you should try higher timeframes, or do multi-timeframe analysis.
"There's a sucker born every minute" - P.T. Barnum
Quoting Proximus
Anyone else wants to share his thoughts about timeframes?
I trade 5m or 15m though im still struggling with it.
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