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Timeframes and the learning process

  • #1
  • First Post: Jun 18, 2010 9:09am Jun 18, 2010 9:09am
Hi
Just an observation, really.
I've always tried to trade predominantly on the higher TF's. This has been mainly due to advice received (J16, Jacko, BRV to name but a few), and the collection and assimilation of certain bits and bobs of perceived market wisdom to do with market 'noise' etc.
Due to a seismic change in my personal circumstances a few months ago, I've had to attempt to bring into being a methodology to use on a low TF (M1) in order to attempt to compound rapidly from a low(er) base point. This has run against everything I've been trying to achieve for the past few years, and I went into it with a nagging doubt that it was going to turn out to be a fools errand.
But here's the strange thing.
As I've immersed myself in the lower TF, I've found that this time round, after several years of higher TF study, I feel as though I'm 'seeing' things which were previously unintelligible to me. Difficult to describe really, as I'm not actually 'fluent' enough to be able to sum up in words what I mean!
Certainly not a language which I'm fluent in yet, but no longer as alien as a first visit to Japan, if you know what I mean.
Just wondered if anyone else had trod the same, or similar, path of chart time being the only route which may lead to success?
  • #2
  • Jun 18, 2010 11:09am Jun 18, 2010 11:09am
Quoting Interceptor
Difficult to describe really, as I'm not actually 'fluent' enough to be able to sum up in words what I mean!
...the only route which may lead to success?
Yes, M1's about all I've ever done. Many odd and wondrous shapes await you to decipher. Welcome!
  • #3
  • Jun 18, 2010 11:18am Jun 18, 2010 11:18am
Quoting Interceptor
Hi
Just an observation, really.
I've always tried to trade predominantly on the higher TF's. This has been mainly due to advice received (J16, Jacko, BRV to name but a few), and the collection and assimilation of certain bits and bobs of perceived market wisdom to do with market 'noise' etc.
Due to a seismic change in my personal circumstances a few months ago, I've had to attempt to bring into being a methodology to use on a low TF (M1) in order to attempt to compound rapidly from a low(er) base point. This has run against everything I've been...
That's the way to go !
I started with monthly, weekly and daily, today I'm in 10 sec, 1 min, 5 min, 30 min. It's easy, natural, low pressure.
And it could be great for compounding because you literally have tens of opportunities per pair and per day.

You'll start to understand intuitively the lower time frames, you'll soon recognize the patterns, you'll find indicators that work with them and you'll be able to automate everything if you want to !

I wish you luck
  • #4
  • Jun 19, 2010 1:16am Jun 19, 2010 1:16am
I've traded mostly shorter TFs--1hour or less. Then, as you did, I made the foray into even shorter time frames and found that these suited me better.
There are those who will jump in and say it doesn't matter--price is moving the same on all timeframes, which is true. But there is a lot of tradeable movement within one 4hr or one daily candle. Minor news, daily opens and closes for each of the major markets, etc., usually offer some short term opportunity that won't show up an a longer term chart--at least not in candle patterns. Of course the price movement in numbers will show up, same as on short term charts. But there won't be much visual aid.
One caveat: Always remember your motive. If trading a 15 min chart and you see what you expect to be a 40 pip opportunity with a 20 pip risk, be happy with 40 pips if you get it.
Or in other words, if you are trading a tight 30 pip range, be happy if you can capture half of each move and repeat several times in a session. Sometimes it helps to set a hard TP. It's imperative to keep your win rate exceptionally high when shooting for smaller targets. Don't make the easy mistake of seeing a series of scalps go 10 or 15 pips in your favor, only to let them reverse and turn into a loss.

BTW, Since an occasional home run can be pretty satisfying, I usually have at least one long term trade running as well. Here in the U.S. it helps to have either more than one account, or at least a broker who provides sub-accounts. It sucks to have an open trade based on a long term directional bias, but not be able to take a few short term scalps in the opposite direction on the same pair.
  • #5
  • Jun 19, 2010 2:03am Jun 19, 2010 2:03am
what would you suggest is a good EA for the short time frames or an EA to help with money management or stop losses and take profits? I too have been trading short TF's and it really fits me, but I find my very manual process too slow. Any suggestions? Thanks in advance.
  • #6
  • Jun 19, 2010 3:10am Jun 19, 2010 3:10am
I've had similar experiences. I mainly focus on higher timeframes(1h and higher) but I occasionally will drop down to the 1m timeframe. The 15 and 30m timeframes are pretty much just a noisier and watered down version of the 1h to me anyway, but the 1m really gives a different view and is the only really "short" timeframe i've ever had success on. Oddly enough, I've found the 5m timeframe to be the worst for me.
  • #7
  • Jun 21, 2010 4:20am Jun 21, 2010 4:20am
Quoting billflet
I've traded mostly shorter TFs--1hour or less....
The issue re taking multiple, smaller profits is something which I'm currently acclimatising myself to. A complicating factor is the question of aggregating your results over a period of weeks and months. If you 'loan' funds to the market, then you have to expect repayment of them sooner or later. This, unfortunately, makes a plain, vanilla 'daily target/turn off the screens' approach unworkable. An unexpectedly lower level of capitalization does now mean that enhanced control over stop distances is critical to me. But I must confess that I'm quite enjoying this lower TF stuff!

Cheers
  • #8
  • Jun 21, 2010 4:37am Jun 21, 2010 4:37am
Quoting Interceptor
The issue re taking multiple, smaller profits is something which I'm currently acclimatising myself to. A complicating factor is the question of aggregating your results over a period of weeks and months. If you 'loan' funds to the market, then you have to expect repayment of them sooner or later. This, unfortunately, makes a plain, vanilla 'daily target/turn off the screens' approach unworkable. An unexpectedly lower level of capitalization does now mean that enhanced control over stop distances is critical to me. But I must confess that I'm quite...
I started off trading M1 and was one of the lucky traders who started making money right off the cuff.

Everyone was telling me that M1 is too risky, too fast and nothing more than noise. I felt like I was somehow doing something that I wasn't supposed to be doing. I went on to read a whole world of threads on M15, H1 and H4 strats and eventually got to trading M15 using one or two well proven approaches. I had good days and bad days and then eventually ended up about break even after a number of months. With a need to pay bills, i've gone back to M1 and am once again dragging in the ££££'s.

What there is, is a great ignorance with some traders. Those who do weekly, Daily or H4 charts will always have an inbuilt bias that says trading M1 is a fool’s venture and that the spread is so against you that you won't ever make money. There are M1 traders who think longer TF traders are the fools because it may take them a week to make what they will in a day. The reality actually is that there is a TF to suit every person and every personality and it's entirely possible to make money on all of them.

Timeframe snobbery is one of the odd absurdities of Forex trading forums.
  • #9
  • Jun 21, 2010 4:58am Jun 21, 2010 4:58am
Quoting Trotty
I started off trading M1 and was one of the lucky traders who started making money right off the cuff.

Everyone was telling me that M1 is too risky, too fast and nothing more than noise....
Timeframe snobbery!
That's a brilliant way of describing it!

Cheers.

PS - You bothered about Beckford?
  • #10
  • Jun 21, 2010 5:10am Jun 21, 2010 5:10am
(remember, all done on demo - im not a fool)
I started out with D1 to allow enough decision time. went horribly wrong. went down to 1H, went unexpectedly good. experimented on 1M last couple of weeks and discovered a real nice pattern and opportunity. will monitor this the next 2 months, if it continues, ill put it to the test.

i think the only disadvantage on the low timeframes (1M + 5M) is the speed with which you have to react.

EDIT: one superior advantage of the lower tf's is clearly trading frequency. the more trades you make, the faster you learn. on D1 you make way less trades, which implies you learn far slower. (only my opinion of course)
Patience is key.
  • #11
  • Jun 21, 2010 5:11am Jun 21, 2010 5:11am
i like to think the higher-timeframe traders are simply losing at a slower rate. a day of m1 is like a month of h1.
Congratulations ScalaFX for coming out of the closet!
  • #12
  • Jun 21, 2010 5:16am Jun 21, 2010 5:16am
Quoting Interceptor
Timeframe snobbery!


PS - You bothered about Beckford?
Would like to have kept him but wish the fella well to be honest!

We'll miss him but we'll surive..... I hope!
  • #13
  • Jun 21, 2010 5:18am Jun 21, 2010 5:18am
Quoting nubcake
i like to think the higher-timeframe traders are simply losing at a slower rate. a day of m1 is like a month of h1.
It is actually possible to make money in trading, you know
  • #14
  • Jun 21, 2010 5:26am Jun 21, 2010 5:26am
TF is almost everything. Fully understanding of TFs, we can then catch trend. There is no good or bad toward lower or higher. I would recommend a beginner to try every TF and find a few most suitable. Let'say, an impatient man can not trade with DAY or wek, even H4. However, one with slow reaction can not trade M1 or M5.
  • #15
  • Jun 21, 2010 5:42am Jun 21, 2010 5:42am
Quoting Trotty
It is actually possible to make money in trading, you know
lies!

i seriously wonder though when the tides will turn on some of the popular longer tf strategies. if i can have, let's say, a month or more of profitable 1min trades before that particular strategy unravels itself then what's to say the same isn't occurring on the higher tf strategies and at some point it will all go south... whether that is a few years from now, a month from now, or maybe already in the process?
Congratulations ScalaFX for coming out of the closet!
  • #16
  • Jun 21, 2010 5:47am Jun 21, 2010 5:47am
The most important linkage is that between capitalization and TF.
It doesn't matter how good the proposed method is, if your account can't withstand the necessary drawdown then it's useless to you at this moment in time.
  • #17
  • Jun 21, 2010 5:48am Jun 21, 2010 5:48am
Quoting nubcake
lies!

i seriously wonder though when the tides will turn on some of the popular longer tf strategies. if i can have, let's say, a month or more of profitable 1min trades before that particular strategy unravels itself then what's to say the same isn't occurring on the higher tf strategies and at some point it will all go south... whether that is a few years from now, a month from now, or maybe already in the process?
I guess it depends if you trade price action strategies or indicator driven systems.

A strategy based on price action, chart patterns, trendlines and feel will be with you a lifetime. The only thing that may fail is you.

Systems, largely, do have a lifespan or certainly will have period where the market behaves in a certain way that they just stop delivering results for a period.

Systems like THV seem to have stood the test of time in a variety of markets so far but surely there reaches a point in time that you just want to learn to trade, rather than learn to follow what a set of indicators tell you to do?
  • #18
  • Jun 21, 2010 6:12am Jun 21, 2010 6:12am
what is THV? i have not come across this term before. if it is indicator based then that would be why.
Congratulations ScalaFX for coming out of the closet!
  • #19
  • Jun 21, 2010 6:17am Jun 21, 2010 6:17am
Quoting nubcake
what is THV? i have not come across this term before. if it is indicator based then that would be why.
http://www.forexfactory.com/showthread.php?t=127271
Patience is key.
  • #20
  • Last Post: Jun 21, 2010 6:36am Jun 21, 2010 6:36am
Quoting moetzger
http://www.forexfactory.com/showthread.php?t=127271
oh right, ta. that's the kind of thread i don't give attention to due to the pretty charts.
Congratulations ScalaFX for coming out of the closet!
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