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Longer Time Frames

  • #1
  • First Post: Jun 27, 2007 1:34am Jun 27, 2007 1:34am
I'm very new to forex and the list of things I don't yet understand is long but in particular I can't get my head around the concept of longer timeframes. On this forum I read traders describing the benefits of longer TFs and the one comment that always emerges is that using a 4H TF, for instance, is much more tranquil than using a 5M because you don't have to live on top of the computer and you only need to check it every 4hrs. Now these people are obviously experienced traders and know what they're talking about, but what puzzles me is this - no matter what TF you use the price is going to do what it's going to do so why should it be more relaxing to trade this way. I would have thought just the opposite. To me the thought of making an entry on a very volatile pair like GBP/JY and then not monitoring it for another 4hrs is the stuff that nervous breakdowns are made of.

Can anyone lighten my darkness on this
  • #2
  • Jun 27, 2007 1:52am Jun 27, 2007 1:52am
Quoting bundubill
I'm very new to forex and the list of things I don't yet understand is long but in particular I can't get my head around the concept of longer timeframes. On this forum I read traders describing the benefits of longer TFs and the one comment that always emerges is that using a 4H TF, for instance, is much more tranquil than using a 5M because you don't have to live on top of the computer and you only need to check it every 4hrs. Now these people are obviously experienced traders and know what they're talking about, but what puzzles me is this - no matter what TF you use the price is going to do what it's going to do so why should it be more relaxing to trade this way. I would have thought just the opposite. To me the thought of making an entry on a very volatile pair like GBP/JY and then not monitoring it for another 4hrs is the stuff that nervous breakdowns are made of.

Can anyone lighten my darkness on this
I dont consider myself an expert but these are what the experts taught me
1) Longer TF has a clearer,stronger and longer trend. You have a lot of time to jump into it.
2) Trading using longer TF will give you a bigger profit per trade so spreads becomes negligible.
3) Support and resistance are more significant and reliable in longer TF.
4) Big player moves the market and they use longer timeframe.

My opinion is even though price will do whatever it wants to do, there's a limit to what price can do in a period. For example, you cant expect GBPUSD to go up 1000 pips in a day even though GBPUSD is well-known for it's volatility. It may happen (World War III?) but very unlikely.
  • #3
  • Jun 27, 2007 2:51am Jun 27, 2007 2:51am
Quoting luqmanz
I dont consider myself an expert but these are what the experts taught me
1) Longer TF has a clearer,stronger and longer trend. You have a lot of time to jump into it.
2) Trading using longer TF will give you a bigger profit per trade so spreads becomes negligible.
3) Support and resistance are more significant and reliable in longer TF.
4) Big player moves the market and they use longer timeframe.

My opinion is even though price will do whatever it wants to do, there's a limit to what price can do in a period. For example, you cant expect GBPUSD to go up 1000 pips in a day even though GBPUSD is well-known for it's volatility. It may happen (World War III?) but very unlikely.
Thanks Luqmanz. That's very helpful. I didn't know that support and resistance increased in significance with the TF. Would it be right to assume that as I am going to be in the market longer I should increase the size of my stoploss ?

Thanks for your help.
  • #4
  • Jun 27, 2007 2:56am Jun 27, 2007 2:56am
On longer timeframes:

 

  1. the spread is a smaller proportion of the average range, hence giving you a fighting chance at success.
  2. You are only taking one or two trades a week at times, giving you time for golf, family and life in general. EOD trading only takes 5 - 10 mins per day and you will find that succesful traders are rarely a slave to the screen.

"To me the thought of making an entry on a very volatile pair like GBP/JY and then not monitoring it for another 4hrs is the stuff that nervous breakdowns are made of."


You have answered your own question:

"the price is going to do what it's going to do" Stops get hit whether you watch the screen or not. Personally I would rather be playing golf when it happens.

  • #5
  • Jun 27, 2007 3:09am Jun 27, 2007 3:09am
Me... expert, in this market .... yes I would like a piece of that to please...

No one can say what the market will be doing in the next minute, hour or day, but since I moved to Dayllies, I've had great success and I only check my trades at 6am GMT+2 in the morning lock in profit and reset my alerts accordingly.

When the price reach a certain Price an Alert are send to my mobile and only then will I look again.

In the begining of a trade and at the end when the alerts start to pour in, will I spend the most of the day in front of the PC.

An exampple:
I enterd a GU Long on the 18th June @ 1.9970 and spend that day infornt of the PC, since then I propably spend 2hours on the trade. The alerts started yesterday and I spend some timeon the PC, this morning I reseted my alerts and also set an order to go short at 1.9930, this was picked up and my profit taking for my Long position is set at 150 pips. I'll propably need to spend the next day or so watching it and then let it ride the current trend.

At the end of the day you should get something that suits you, trading is more YOU than the TF/System/Indicator or whatever.
  • #6
  • Jun 27, 2007 3:11am Jun 27, 2007 3:11am
Quoting bundubill
Would it be right to assume that as I am going to be in the market longer I should increase the size of my stoploss ?
It's crucial to understand which time frame you're basing your trading decisions off as far a target price, stoploss and time scope go. If you're trading the intraday, your stoploss, target price and timit-limits policies are very different than if you're trading off the Daily chart.

Also, other aspects of trading vary such as money management. If you trade off the longer time frame, perhaps it's best to scale in and out of a position as the trade evolves, which many times it's simply not possible in the very intraday trading due to higher spread relative cost. Also, when you trade longer time frames there are other factors you might want to consider such a positive swaps or macroeconomic fundamental data. In the other hand, when trading the intraday, you gotta juggle around the different news announcements that hit the wires every day because one single news-delivered spike might ruin your trade altogether, whereas you got more breathing to absorb any possible news spike if trading off Daily/Weekly charts.

What I am trying to say is that intraday trading and long term trading are two different beasts and thus you've got to include different variables in the equation depending which of the two you're basing your trade on.
  • #7
  • Jun 27, 2007 4:02am Jun 27, 2007 4:02am
Thank you all for helping to illuminate my mental fog.

Fx1618 Can I ask you about the system you are using ? Obviously if you don't want to diclose it, I fully respect that.

Good luck to all and many thanks
  • #8
  • Jun 27, 2007 4:17am Jun 27, 2007 4:17am
Fx1618 Do you currently have two positions open on GU? One long at 1.9970 and the other short at 1.9930,or have I missread your last post?
  • #9
  • Jun 27, 2007 4:29am Jun 27, 2007 4:29am
Quoting bundubill
Thank you all for helping to illuminate my mental fog.

Fx1618 Can I ask you about the system you are using ? Obviously if you don't want to diclose it, I fully respect that.

Good luck to all and many thanks
With pleasure, but keep in mind that I'm not a pro, do make a living though and with compounding.... Bora Bora does not seem that far away anymore.

The basics can be found at
http://www.forexfactory.com/showpost...15&postcount=7

I truly use this and then some human intervention or like the Lady's would call it ... sixth sense, but I try not to have to many emotions involved in fx
  • #10
  • Jun 27, 2007 4:36am Jun 27, 2007 4:36am
Quoting Four Kids
Fx1618 Do you currently have two positions open on GU? One long at 1.9970 and the other short at 1.9930,or have I missread your last post?

My sincere apologies, it should have read
GU Long 1.9770 with profit taking at 1.9920 entered the 18th June

and the one from this morning
GU Short @ 1.9930 ... , although this one is keeping me busy.
  • #11
  • Edited 7:24am Jun 27, 2007 6:45am | Edited 7:24am
Quoting Fx1618
With pleasure, but keep in mind that I'm not a pro, do make a living though and with compounding.... Bora Bora does not seem that far away anymore.

The basics can be found at
http://www.forexfactory.com/showpost...15&postcount=7

I truly use this and then some human intervention or like the Lady's would call it ... sixth sense, but I try not to have to many emotions involved in fx
Thanks Fx1618

I appreciate your generosity

Can you tell me please. Do I enter on the next days candle after the cross (at 6.00GMT I think you said) ? I assume the RSI for confirmation is above/below the 50 level depending on whether long or short ?

Many thanks for your help.
  • #12
  • Jun 27, 2007 9:14am Jun 27, 2007 9:14am
Quoting bundubill
Do I enter on the next days candle after the cross (at 6.00GMT I think you said) ? I assume the RSI for confirmation is above/below the 50 level depending on whether long or short ?
Its a pleasure

No, I enter when they cross, and yes the RSI is above or below the 50 level and I study my trade at 6am GMT +2 for the past and following day, the only reasson for this time is this is when I wake up.

Most Traders here will say wait for the candle to close, esspesially on longer TF.... Remember the YOU in the method and that those are the basics of my way. I attached the Turtle rules ... this is how this came about

I ussually look at smaller TF after a cross has occured. The actual 1EMA also plays an import role, thats how I set my allerts ... and also why I'm currently 40 pips in the red on the GU Short taken today
Attached File(s)
File Type: pdf turtlerules.pdf   251 KB | 252 downloads
  • #13
  • Jun 27, 2007 9:56am Jun 27, 2007 9:56am
Quoting Fx1618
Its a pleasure

No, I enter when they cross, and yes the RSI is above or below the 50 level and I study my trade at 6am GMT +2 for the past and following day, the only reasson for this time is this is when I wake up.

Most Traders here will say wait for the candle to close, esspesially on longer TF.... Remember the YOU in the method and that those are the basics of my way. I attached the Turtle rules ... this is how this came about

I ussually look at smaller TF after a cross has occured. The actual 1EMA also plays an import role, thats how I set my allerts ... and also why I'm currently 40 pips in the red on the GU Short taken today
Hi Fx1618,

Once again many thanks for getting back to me. I PMd you because I didn't think my last question made sense and I didn't really understand about the alerts, but I'm sure it will all be contained in your turtle rules so I'll read through those. The last thing I want to do is make a damn nuisance of myself because you've been extremely helpful and patient. If there is anything in the rules I don't understand perhaps you wouldn't mind one more question.

Best wishes and good luck
  • #14
  • Jun 27, 2007 3:36pm Jun 27, 2007 3:36pm
Picking the correct time frame to trade with is crucial to the success of any Forex Trader. Each time frame represents completely different trading opportunities and it is important to understand how to put each time frame into perspective.
  • #15
  • Jun 27, 2007 6:25pm Jun 27, 2007 6:25pm
The collection of rollover interest is also a perk of being a longer term trader.

Over the past 3 days I have made $38.50 rollover interest on the USDCHF.
Since yesterday I made $38.70 rollover interest on the USDJPY. Whilst short term traders are hurt by spread, longer term traders are benefitted by interest.

http://img186.imageshack.us/img186/7...june200sd3.jpg


You might think that longer term trading means less profits due to less trades, but as you can see by my account statement below, I have made $4211.84 nett this month so far on a $20,000 account which is a 21% increase on only 12 trades!

http://img294.imageshack.us/img294/2...8june07bx2.jpg

http://img294.imageshack.us/img294/4...sheet28bn2.jpg
  • #16
  • Jun 27, 2007 10:13pm Jun 27, 2007 10:13pm
Quoting bundubill
Hi Fx1618,
but I'm sure it will all be contained in your turtle rules so I'll read through those.
I would like to clarify something here... I would not like to be know as a impersonator or anything in that matter.

I'm also just trying and the turtle rules are not mine, My method is just loosely based on theres.

But keep asking as we all learn here from each other, but since this tread was for Longer TF, I suggest that you ask Q about the method that I use on my Journal if you do not mind. http://www.forexfactory.com/showthread.php?t=34540
  • #17
  • Jul 5, 2007 9:03pm Jul 5, 2007 9:03pm
Quoting bundubill
Thanks Luqmanz. That's very helpful. I didn't know that support and resistance increased in significance with the TF. Would it be right to assume that as I am going to be in the market longer I should increase the size of my stoploss ?

Thanks for your help.
Stop loss size depends on your method and the distance from support/resistance. What more important is to trail your stop to protect profits.
  • #18
  • Jul 17, 2007 8:16pm Jul 17, 2007 8:16pm
A small article about choosing timeframe.

http://specutrade.blogspot.com/2007/...-to-trade.html
  • #19
  • Last Post: Jul 18, 2007 3:37am Jul 18, 2007 3:37am
Quoting luqmanz
A small article about choosing timeframe.

http://specutrade.blogspot.com/2007/...-to-trade.html

Very interesting. Thanks for that luqmanz
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