Noise preventing profitablity altogether?

A professional trader please tell me do nosie in lower timeframes prevent profitability altogether and should we abandon trading in low timeframes for this fact?

If you're trading intra-day then you have to know how to figure out the mood of the day and avoid trading during bad days, or trade consolidation patterns (like a box trade) that indicate a "build-up" of energy.

Most people develop around a particular daily pattern (like a gap or a reversal pattern) that indicates a higher degree of directional conviction for the day, then trade that responsively depending on how price behaves (test-drive, test-test-drive, gap-test-drive, gap-test-failure, etc).

In order to be profitable in low timeframes trading in the direction of the prevailing trend would do the trick?

The problem is that there is no trend there are hundrets of trends. Only
depends on how big your magnifying glasses are. You should decide how long you want to hold your positions that determins what trend you are interested in.

If you place a trend's data in a spreadsheet you will find that there are as many, if not more, down days on an up trend than up days. It is just that the up days come in bigger percentages. So the theory of avoiding trading against the main trend when you scalp intraday is a rather pointless endeavor. Sure, if you only trade when things are "looking up" you will have a better chance at getting some fine % gain, but given there are more down days... there is also a better chance that up day turns around and closes down.

I do think people who daytrade need to have a "system" more than anyone else. A system, as in backtested, point-by-point. I gave up on that, I just watch trends now. People can make money on small TFs, if you can't, don't worry about it. Preserve your money and try to catch the big moves over weeks or months if minute charts are troubling. Who knows, maybe if you stay alive long enough you can come back to daytrading later when you discover something not seen by you now?

I think there are plenty of pips to be taken on small time frames. Particularly because technical analysis indicators (esp RSI) I are much more sensitive and less driven by the trend. Obviously you can get this to work for you or it can work against you depending on how you interpret the signal.

I personally like trading 1 min charts because my daily pip target is only 10 on average (so I aim for 20 per trade to cover possible losses). Most trades last around 10 minutes, and if you have the ADX up on the screen it's pretty easy to spot false signals from RSI and stochastics.

However I think trading with trend systems you might struggle with such a short time frame as, like you say the noise market can interfere with the trend. A possible solution would be to use the 1m chart with a longer range chart - 30mins maybe. This will give you the bigger picture and allow you to use the 1m chart to pick a more precise entry point.

EFILER

maybe because of how we trade what peeps refer to as "noise" on the lower timeframes seem of no matter to the ability to create pips because WITHIN the noise are the REAL points you want, and theyre pretty simple to see if one has the right tools

on a one minute timeframe, weve identified a minimum of 5 different and correct trades which are handled in any number of ways.

when im bored, i simply make 5 buy trades (assuming its long of course) and set individual tp's for each one of these trades, working my way UP from lowest to highest. If im NOT bored, i simply play the trades from resistance to support to the NEXT higher resistance point, while avoiding counter trades in strongly trending markets.

using the 3 or 5 minute as a trend guide, with a few glances at the 15 and a long ago glance at the H1 for overall trend, we seem to be nailing each possible support and resistance point.

all im pointing out is what is referred to as "noise" coupled with trading prevailing trends, most definitely provides us with profits to the pip, so i really dont understand the word at all.

enjoy and trade well

mp

FXMONK
Thank you for sharing your trading Method.

From your experiance do you disagree that indicator combinations won`t make success in the long run because of inevitable happening of choppy markets? What is your opinion about this statment? Some successful trader had told me this. Thank you.

You advise me correctly. Thanks.

not to alter your ideas, but how WE trade can be found in the rookie section -- just look for my < MP > and the thread where WINNERS are being trained

enjoy and trade well

mp

please to understand, while we use indicators in a differing style than what would be considered "usual", those indicators are NOTHING more than a line that represents price action.

the other method of representing price action are "candles" and both "schools" are simply looking at price action with DIFFERENT instruments that are BOTH telling the same story.

THAT put aside, there are a few HIGHLY ACCURATE forms of technical trading, that while using indicators, DO NOT depend on them for entries and exits, and over a period of years, backtestable and forwardtestable, they work because theyre simply based on the well understood behavior of traders in both the long and short terms.

this process cannot be explained in ONE post, but is fully explained in my thread because what we teach is NOT a system, per se but a way of LOOKING and UNDERSTANDING what the market is doing at any point of the day.

the only thing i can say, having been building this concept for years, is that rank beginners a few weeks ago are now accumulating pips that they cannot believe, at a rate they would have thought completely impossible.

Other than success, I cannot give it the credit and explanation this teaching produces in a short post ----- just take a look for yourself, and its all FREE !

enjoy and trade well

mp

Maybe a good technique to use is draw a line on the previous day's close. Use your enrty tecnique to sell below this line or buy above this line. This way you can take advantage of trending moves as well as counter trend moves.

Nod. You can certainly use yesterday's high and low as a filter if you want. Altho some of the best moves (and best positions) will occur against that filter.

For instance failure above yesterday's high to advance further usually ends up with a short term (M5) price pattern (box trade, double bottom, H&S, sharp V). If that breaks and falls below the high, then there's a very good reason to expect that price has hit serious resistance and is going to make some short term lows.

Depending upon what TF that resistance was at, the reversal may be short term or long term. This works especially well in ranges or at/near trendlines and can be used to get a very good entry position if it's in line with a longer term trend. Incase that doesn't make sense, just stick a stochastic (8,3,3) on your H4 chart. An "oversold" failure that makes a higher low would indicate an up trend, an "overbought" failure that makes a lower high would indicate a down trend. Draw the trendline to those points, look for an entry.

Case in point is the aussie/usd chart. It's been in an up-ish trend since consolidation broke out. In the pictures, one is the H4 the other is the D1. Notice how price breaks below yesterday's low in the highlighted area, but fails to continue when it tests for resistance. The result is a strong V-bottom at the low, and on the daily, you see an infamous pinbar pattern telling you "Hi there, we've failed to make any real headway here. We tried to reverse the uptrend breakout, but we just couldn't do it."

If you compare that to behavior at that price level earlier on, you'll notice that more buyers have entered the scene. Beforehand price was a bit murky there, now it's quite clear. That "clarification of support" following an uptrend breakout pattern on a higher TF would've given you a great place to hang your hat for a stop loss. Go long, put your SL below that swing low a few pips, and just hang on.

The rest comes down to technique and exits... which I could write a book on. Normally tho the easiest way to manage it is to trade multiple lots. At the last swing high (.7230 level on that chart) take some of your profit, move the rest to breakeven and trail a stoploss behind it. That way you end up with "a runner" that can just go the length of the trend. You don't need to know the precise exit that way, making life much easier.