What has more influence bigger or smaller time frame? | Forex Factory

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What has more influence bigger or smaller time frame?

  • #1
  • First Post: May 21, 2008 1:06am May 21, 2008 1:06am
Hello,

This is David here wish to ask the bros and senior members to help me understand the influence of the bigger time frame price action to the smaller time frame price action or vice versa?

I wish to know if price direction on the bigger time frame tells you the future direction of the smaller time frame price action or the price action in the smaller time frame could very well shift the original direction of price action in the bigger time frame?

Pls reply, I thank you very much
David
Forex Price Action Hacked - Price Action Rockstar
  • #2
  • May 21, 2008 1:32am May 21, 2008 1:32am
Quoting david_akc
Hello,

This is David here wish to ask the bros and senior members to help me understand the influence of the bigger time frame price action to the smaller time frame price action or vice versa?

I wish to know if price direction on the bigger time frame tells you the future direction of the smaller time frame price action or the price action in the smaller time frame could very well shift the original direction of price action in the bigger time frame?

Pls reply, I thank you very much
David
A good question. As a general rule the higher TF should take precedence, but this is only true while the trend in the higher TF is in place of course.

By definition, a change of trend in the higher TF will be preceded by a change of trend in the lower TFs, the difficulty is knowing whether the change of trend in the lower TFs are just counter-trend moves or signifiy a change of trend overall!
  • #3
  • May 21, 2008 2:13am May 21, 2008 2:13am
neither
https://linktr.ee/Soultrader
  • #4
  • May 21, 2008 2:36am May 21, 2008 2:36am
Quoting soultrader
neither
that makes perfect sense.
  • #5
  • May 21, 2008 4:02am May 21, 2008 4:02am
not sure if that's sarcasm or if you agree with me.

i'll guess you're looking for an explaination.

1. price action is price action no matter what the timeframe is. if you zoom out on a 30 min chart you can see the same patterns as a one hour chart and a four hour chart - just there are more bars.

2. if you are taking signals on a 30 min chart then the 30 min chart is the most important (replace 30 min with your chosen number)

3. looking at a daily chart if you are a 15 minute trader is like getting out a street map for Las Vegas when you are still in Alaska.

4. no matter what the timeframe you can win - a 30 minute trader can be long and win the trade whilst a 4 hour trader is short and can win - even if they are in at the same time - reason? the 30 min long is noise to the 4 hour short but the 30 min trader is trading that noise whilst to the 4 hour trader it's just waiting time. given this fact then who cares which is strongest.

as a side point:

Looking at multiple timeframes is confusing. The daily may be long whilst your 30 min chart is short, but if your tolerance for pain of drawdown is only 30 pips then what's the point of taking note of the daily anyway?

My advice would be this to those who struggle looking at multiple timeframes.

Decide on your pain level of drawdown and then find the right timeframe for that pain level and stick to it. it doesnt really matter whats happening higher up or lower down - sometimes the higher timeframe will be right and sometimes the yours will will, chances are it will be swings and roundabouts and that's trading, but if you stick to one and not be influenced by the other then you'll come out on top.

simplicity is the key.

Hope this helps
https://linktr.ee/Soultrader
  • #6
  • May 21, 2008 12:48pm May 21, 2008 12:48pm
Quoting soultrader
not sure if that's sarcasm or if you agree with me.
no seriously... i agree. and its not sarcasm. short term or long term, its all shown in the chart.
  • #7
  • May 21, 2008 1:57pm May 21, 2008 1:57pm
Go with the DAILY charts it is the most looked charts followed by the weekly.

All banks/institutions/traders/speculators/hedge fund managers/any big hot shot with allot of money will always look at daily charts but not necssairly intra-day.
  • #8
  • May 21, 2008 2:13pm May 21, 2008 2:13pm
Humans understand patterns, shapes, and colors and assign meaning to them. We're visual creatures just as dogs are olfactory and bats are auditory.

Time frames are a way of parsing PA into discreet chunks for us humans to more easily identify patterns. If there were no time frames, a price chart would consist of a single humongous bar with an open, a high, a low, but no close. Pretty useless. Ya gotta break up that single big ol' bar into meaningful sub-units. Time is a universally understood concept so that's the easiest default sub-unit of choice.

Are you familiar with point & figure charts? What makes them intriguing is they don't use time as the sub-unit. Each bar is made up of consecutive up-ticks or down-ticks. If there's no price movement, or movement in only one direction, a new bar won't form no matter how much time passes. P&F charts are studies in pure PA.
  • #9
  • May 21, 2008 5:09pm May 21, 2008 5:09pm
Quoting david_akc
Hello,

This is David here wish to ask the bros and senior members to help me understand the influence of the bigger time frame price action to the smaller time frame price action or vice versa?

I wish to know if price direction on the bigger time frame tells you the future direction of the smaller time frame price action or the price action in the smaller time frame could very well shift the original direction of price action in the bigger time frame?

Pls reply, I thank you very much
David
WOW! I Wish I had an answer for that!
You are trying to Compare Amps to Volts.
But both are required to come to a Conclusion.

Shorter TF will Turn Before the Longer TF.
If the Longer TF also Turns, you got Early warning from the Shorter TF BUT... This has to be confirmed.

Consider it as Water Flowing Through a Pipe.

Volts = the Diameter of the Pipe {Volume}&
Amps = the Pressure. {Price Change}

Point the Hose to the Sky...
3' Dia Hose with 25 PSI, How high will your Water Spout be?
1/2" Dia Hose with 25 PSI, How high will your Water Spout be?

I know that Volume in Forex is the Elusive Componant but therin lies the rub, aka, your answer. ___
In Other Words... Pay Close attetion to your Pairs.
  • #10
  • May 21, 2008 9:02pm May 21, 2008 9:02pm
Quoting opie999
Humans understand patterns, shapes, and colors and assign meaning to them. We're visual creatures just as dogs are olfactory and bats are auditory.

Time frames are a way of parsing PA into discreet chunks for us humans to more easily identify patterns. If there were no time frames, a price chart would consist of a single humongous bar with an open, a high, a low, but no close. Pretty useless. Ya gotta break up that single big ol' bar into meaningful sub-units. Time is a universally understood concept so that's the easiest default sub-unit of choice.

Are you familiar with point & figure charts? What makes them intriguing is they don't use time as the sub-unit. Each bar is made up of consecutive up-ticks or down-ticks. If there's no price movement, or movement in only one direction, a new bar won't form no matter how much time passes. P&F charts are studies in pure PA.
what abt tick charts?
  • #11
  • May 22, 2008 12:48am May 22, 2008 12:48am
Quoting soultrader
i'll guess you're looking for an explaination...
Those are wise words. I wish I had read them 5 months ago when I was playing around with time frames.
Not all sins are created equal
  • #12
  • May 22, 2008 1:13am May 22, 2008 1:13am
Quoting jest1081
what abt tick charts?
What about them?
  • #13
  • Jan 26, 2010 7:09pm Jan 26, 2010 7:09pm
Quote
not sure if that's sarcasm or if you agree with me.

i'll guess you're looking for an explaination.

1. price action is price action no matter what the timeframe is. if you zoom out on a 30 min chart you can see the same patterns as a one hour chart and a four hour chart - just there are more bars.

2. if you are taking signals on a 30 min chart then the 30 min chart is the most important (replace 30 min with your chosen number)

3. looking at a daily chart if you are a 15 minute trader is like getting out a street map for Las Vegas when you are...


Great post by a great trader.
  • #14
  • Jan 26, 2010 8:01pm Jan 26, 2010 8:01pm
Also in the "Neither" Camp here.

You could say the D1 trend / direction is up, so whilst trading H1 you only want to take Longs, to be with the longer trend and improve your odds.

But your still better off picking the current direction to trade off your H1 chart, your just waiting for a Long play.

Just because D1 is up, doesn't mean you can have a 200pip down move ( on all TF's LOL )
Nothing to it, but to do it!!! Stick to the plan FOOL!!!!
  • #15
  • Mar 27, 2011 9:54pm Mar 27, 2011 9:54pm
FWIW I would tend to agree that the top (higher TF) down approach is best except around news (either scheduled or ad-hoc).

In such cases, almost every active trader 'dials' down to a lower TF.

I guess you could say that the higher the volatility, the lower the timeframe that should be considered...

All the best...
  • #16
  • Mar 29, 2011 2:29am Mar 29, 2011 2:29am
Average day candle has more pips than average one hour candle. So everything else is bigger - support and resistance levels and so on. On higher time frame you play with another numbers.
  • #17
  • Apr 4, 2011 6:54pm Apr 4, 2011 6:54pm
FWIW I tend to favour agreement on timeframe analysis. In other words, if a low timeframe, say 1 min is confirmed by a couple of timeframes up in my analysis, I will tend to increase my position size in the relevant agreed direction.

At the moment, there is no science to it, so not as simple as 3x min stake or anything. Have been meaning to get around to developing this but I'm very time-poor atm

Just my 2 cents...
  • #18
  • Apr 4, 2011 8:53pm Apr 4, 2011 8:53pm
although i am a beginner
i would say 'Neither' too...

a bigger trend might show up/down trend
but it can turn anytime too
just like in smaller tf

(sorry for my poor english, i not sure what is the best way to explain it)
  • #19
  • Jun 25, 2022 3:58am Jun 25, 2022 3:58am
you're right ..... the lower timeframe controls the lead in the market space ....... without the start of an engine , the tires won't roll..... the smaller timeframe does the influence while higher time frame paints the picture of what the smaller time frame is influencing........ you need wisdom in the market ..
  • #20
  • Dec 20, 2022 4:45am Dec 20, 2022 4:45am
Bigger time frame gives us the larger picture and helps in analysis for placing our trades accordingly. Both are really important but I get influenced from larger time frame.
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