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Time frame

  • #1
  • First Post: Oct 3, 2008 9:38am Oct 3, 2008 9:38am
Yeah I know, the time frame issue has been debated many times over and over, but I am hoping I can get some fresh opinions here.

My situation is this: Recently I abandoned "pattern recognition" trading and TA after many months and more than 1500 trades with poor results. After that I started to read about market structure, order flow and fundamental data, and I am now trying to incorporate all this into a trading strategy.

When trading patterns it was easy (and unprofitable), pick a time frame and search for patterns over past data, hoping that those patterns will repeat again in the future. But now that I am not doing this anymore I am not sure what time frame should I use, I am not even sure if I should pick a particular time frame at all. I find myself taking trades without paying too much attention to what time frame I am looking at, and even without paying too much attention to the chart at all.

So, my question comes down to this: is it really necessary to pick a particular time frame and stick to it no matter what? Keep in mind I'm not talking about TA, PA or any other pattern recognition approach.

Any comments are welcome!
"I say high, You say low, You say why, and I say I don't know..."
  • #2
  • Oct 6, 2008 9:48am Oct 6, 2008 9:48am
Well what matters is how much time you have on your hands and if you have patients. I like the 15 minute time frame because the others are just too short and the trading is not as good. I heard of this guy that left the trade open and on Monday he had a 2000 pip spread.
  • #3
  • Oct 6, 2008 1:11pm Oct 6, 2008 1:11pm
There is no need for sticking with only one time frame. Actually one key factor in my strategy is checking long term charts to see how the trend is going and then I look for short positions. For example, at times the EUR will trade to new highs or new lows during the off-peak hours. When this occurs traders will sometimes assume that this move is not backed by a high amount of volume, and therefore may have a strong chance to regress back to the mean or inside of the current range. Therefore if I see the EUR/USD trade to new highs or new lows during the off-peak hours, I may now look for signs in one hour o 4 hour frames.
  • #4
  • Oct 6, 2008 1:53pm Oct 6, 2008 1:53pm
Quoting Ricardo.
...without paying too much attention to the chart at all.
It seems you've answered your own question. I imagine sooner or later an adherent to orthodox FA will stop by and provide better insight.

Should be interesting. I don't think there are that many hard core fundies hanging around.
  • #5
  • Oct 6, 2008 5:43pm Oct 6, 2008 5:43pm
Is there any specific strategy for different time frames or can I apply all to all time frames and indicators as well?
  • #6
  • Oct 7, 2008 7:55am Oct 7, 2008 7:55am
My favourite time frames are Daily & 1Hour
  • #7
  • Oct 7, 2008 4:44pm Oct 7, 2008 4:44pm
my favourite timeframe is h4...first of all for definition of waves...
  • #8
  • Oct 8, 2008 3:46am Oct 8, 2008 3:46am
I use 1 hour, 4 hours and a day time timeframe. On day time the general direction of a trend, the Timeframe is visible is less, for trade.
  • #9
  • Oct 9, 2008 5:52am Oct 9, 2008 5:52am
I always use the 4 hours & 1 hours! but it depend on!
  • #10
  • Oct 9, 2008 8:15am Oct 9, 2008 8:15am
I don't know if you're platform supports it, but I prefer tick charts vs. time charts. Takes the element of 'time' out of the equation and focuses simply on price action.
  • #11
  • Oct 12, 2008 9:47am Oct 12, 2008 9:47am
I trade FX and some other markets full time, on FX I use a 720 Minute time frame, I only stick with the 720 Minute time frame I never look at an other time frame I always follow my system hense why I make money at FX. If you look at my recent trade on GBPUSD I entered in at 18421 and closed at 16860, TA does work if you learn to stick with some good indicators and a timeframe you feel comfortable with, and always remeber good money mangemt and a stop loss. DOG-EAT-DOG
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  • #12
  • Oct 12, 2008 11:17am Oct 12, 2008 11:17am
Thanks for your answers, but the problem is that since I abandoned TA and pattern recognition trading, I can't make any decisions without having a good reason for it. I can't make any trades based on indicators, patterns or colour lines without having information about what the other players are doing/thinking, that's why I turned to order flow, news, rumors, fundamentals, etc.

And I have the same problem with every other aspect of trading, including the time frame aspect.I don't think any particular time frame is by nature more "predictable" than other, I don't even care about it because I am, not looking for patterns in the chart, I can't just pick any time frame at random and turn it into my favourite without any reason.

I guess I am answering my own questions, maybe I shouldn't care about the time frame, maybe I should just keep focusing on numbers, watching what happens when news and other info comes out. The market will do whatever it does and price will go the way it has to go, and it doesn't make any difference if I am watching it on a 1m, 5m, or 4H chart.

"I say high, You say low, You say why, and I say I don't know..."
  • #13
  • Oct 12, 2008 5:06pm Oct 12, 2008 5:06pm
Time frame is important because it will say a lot about how much risk your going to need to take, as well as how long the trade might take to work in your favor. Keep in mind also the longer the time frame, the more reliable your trading signals will be.
  • #14
  • Oct 12, 2008 5:31pm Oct 12, 2008 5:31pm
Quoting big_pipin
Keep in mind also the longer the time frame, the more reliable your trading signals will be.
I am not so sure about that...I still can't find any evidence showing that longer time frames are more predictable or reliable than others.
"I say high, You say low, You say why, and I say I don't know..."
  • #15
  • Oct 12, 2008 7:18pm Oct 12, 2008 7:18pm
Based on what you are saying you should be looking at market depth to see where things are going. Taking this into consideration it will only be beneficial to use a very short timeframe. On top of that if you are not using market depth then it reall depends on your style and what you are looking at. If you are looking at what other traders are doing then you need to be on a tick or 1sec chart etc or something very close. If you are looking at what other countries are doing and foreign relations etc then time frame really won't matter, jump to a daily or whatever you want. Just my .02, I prefer the short time frames, 1 tick, 1sec etc this is true price action what is happening and now
  • #16
  • Oct 12, 2008 7:20pm Oct 12, 2008 7:20pm
Quoting big_pipin
Time frame is important because it will say a lot about how much risk your going to need to take, as well as how long the trade might take to work in your favor. Keep in mind also the longer the time frame, the more reliable your trading signals will be.
lol I don't understand how you can say this
  • #17
  • Oct 12, 2008 7:55pm Oct 12, 2008 7:55pm
Personally, I do not trade anything under the 1hr chart.
  • #18
  • Oct 12, 2008 10:01pm Oct 12, 2008 10:01pm
Quoting fxRichard
lol I don't understand how you can say this
If your trading off the 8hr and weekly charts, do you think setting a 10 pip stop is going to do any good?...LOL no. Maybe a 250 pips stop....larger time frames = larger risks.
  • #19
  • Oct 12, 2008 10:28pm Oct 12, 2008 10:28pm
Quoting fxRichard
Based on what you are saying you should be looking at market depth to see where things are going. Taking this into consideration it will only be beneficial to use a very short timeframe. On top of that if you are not using market depth then it reall depends on your style and what you are looking at. If you are looking at what other traders are doing then you need to be on a tick or 1sec chart etc or something very close. If you are looking at what other countries are doing and foreign relations etc then time frame really won't matter, jump to a daily or whatever you want. Just my .02, I prefer the short time frames, 1 tick, 1sec etc this is true price action what is happening and now
No market depth for me, I trade with Oanda so my only source of information is their news service (IFR forex watch). The "orders board" section seems to be the most valuable resource...those rumors are usually very accurate so I am trying to develop a trading strategy around that kind of information (order flow rumors).

I am also looking into the CME e-quivalents though I don't really know if I can extract something valuable from it.

So, like You said, I prefer short time frames since I like to be able to get a feeling for what is happening right now and that's why I have been following the 1m charts mostly, except for When I see some information highly related to a previous day/week/month, in that case then I do switch to some higher time frame.

Thanks for your answer.
"I say high, You say low, You say why, and I say I don't know..."
  • #20
  • Oct 12, 2008 10:46pm Oct 12, 2008 10:46pm
Quoting big_pipin
If your trading off the 8hr and weekly charts, do you think setting a 10 pip stop is going to do any good?...LOL no. Maybe a 250 pips stop....larger time frames = larger risks.
I agree that larger timeframes = larger risks that is my point. If you want to invest your money then trade on a large timeframe, if you want to make quick money do it on a small timeframe, life is only so long
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