What kind of player are you?

So, dear senior traders and lovers of forex trading,
what kind of chart-watcher are you?

I read many statitstics and all say that in the long run intraday traiding is a loosing hand... When I switched to daily trading everything started to work better

I've been at this forex thing for 1yr. and 3 mos. ... I started out on the 5min and then moved to the 15min .... moved again to the 1hr. I was actually good at trading on the 1hr chart, but I was missing trading signals because of my job. I've since moved to the daily charts and I'm doing great ... I don't have to watch the charts all the time and I've found that I'm more calm while trading on the daily charts. I use to think people were crazy for trading on the daily charts, but now I'm hooked ....

I personally trade all times frames..as long as I see a "Good" trading oportunity I go at it .

examples of charting time frames

30 min: 15-30 pips
1 hours: 40-60 : try using vegas tunnel here
4 hours: 60+ pips : try using vegas here as well

If your trading is not working, Try buying a playstation and some cool games to keep your mind busy while you positions are on the market. use stops and limits always .....ohhh and dont forget about hedging...

Personally i trade only from 4Hr time frame and ignore the daily noise create some elliotwave pattern and trade through it

-cwave

Began learning FX last May 2005 on 1m & 5m charts...some said they were making pips, but in the long run i could see my sanity at sake watching the charts for hours at a time during the London or NY opens. Though i do like the "rush" of trading during the London open off 5m charts in the end, i have to believe all those more wise than i stating that 4hr or daily's (or longer) are the way to consistent profits.

Because of this belief/idea, i am spending about 80% of my efforts in demoing the 4hr/Daily Vegas models. I've not been profitable yet in my demo in these models, but this will come in time i believe. My profitable trades have been during London on 5m charts w/FIBO levels in taken from the Vegas 4hr but set at 144ema or 89ema. If i knew that my mind/body could handle "working" from say 11pm (pacific time) to 2am pt I'd do it! But then as was stated before, there are so many out there that say trading the short term charts is a recipie for disaster that it may be best to move in the longer VWB direction.

I might try an experiment during a 30 day period to see if i can actualy trade the London open each Tue/W/Th? and see if mind/body can handle it?? Sure had fun doing so during my vacation.

Cheers,
Thom

i've edited the poll to change my timeframe from 4h to daily...no going back now.

How to effectively combine mulitple timeframes to maximise your results

It basically is a trading approach for those who like to finetune their entry/exit levels and that do not want to stick to only one timeframe. Some people consider this approach the optimal approach to trading any speculative market, because it tries to get the best possible point to trigger a trade and to bail out of it.

Multiple timeframe combination takes the best from both the longer and shorter timeframe. It will prevent you from rushing in a trade. It will also help you not to get in too late. As for the closing level, it will provide you with hints that will alert you to bail out of the trade (almsot always) at better levels that you could’ve initially thought of.

Alright, I have told you about the basic (main) strengths of this kind of tradding approach, but what about the weaknesses? Well, in my opinion, ther are few weaknesses that would have to do with the approach itself or that could be linked to it. One could arguably say that combining 2 timeframes may make a trader to lose focus on the trade itself and feel unsure because at some point the shorter tiemframe (more noisy) is going to go in longer timeframe’s opposite direction. Although that may be true from a theoretical point of view, the reality shows that when combining 2 timeframes, the shorter will not interfere in the global view once a trade is on, but rather it will help to spot a better closing level for that particular trade. And that I would say is the primary goal of combining timeframes: to explore the different opportunities the market offers us and lead us to trades we can rely on.

Then, why isn’t used by the majority of traders? Well, I think that in a sense there is an important group of traders who are directly or indirectly using this trading approach. They won’t admit it, but I think that people trade using multiple timeframe combination more and more. People realize of the importance to draw out the “big picture”, at least an scenario to work out with, and then to have a timeframe of their choice to use with that scenario, to provide them with triggers to enter the trades. The key thing in working with multiple timeframes is to work a combination you feel comfortable with, not the one that “sounds better” or the one “my friend is using”. That won’t work. Every single trader is different (thankfully!) and therefore every trader will only feel comfortable with his/her own timeframe combination. Therefore, forget about works for others and just concentrate with what you feel really good with. As for me, I have to say that I feel very comfortable with 4hr/60m & 15m, which some people find (15m) too long as the short tiemframe. Usually people uses 10/5/3 minute timeframe as such; well, as you can see, you must stick to what makes you feel comfortable as otherwise you could end messed up.

When combining timeframes, you have to think that really nothing is changing in your trading. I mean, whatever the indicators you use, whatever the setup you are looking for prior to joining any trade, must remain the same. Your trading basics do not have to change. What you will be using is different timeframes to improve your entry and exit price, but that has no real effect on your decision-making process. It will, on the other hand, save you some pennies by filtering some troublesome//bad trades, and occasionally it will prevent you frome executing a good trade, but I think it is worth risking those missed-pips if we compare them to those that will be saved.

In the examples below you will see charts with my technical setups plotted in. They are for informational purposes only. Just think what it would look like with your OWN setup plotted in. The important thing here is that you get the grip on how to use the multiple timeframe trading approach.

What timeframes should I take into account?

As I said before “ use and combine the timeframes you feel more comfortable with”, but the truth is that some hints/tips can be provided to get a better handle to this multiple timeframe combination trading approach.

As a general rule, I would consider the “long timeframe “ anything between 1hr and daily and the “short tiemframe” anything between 15 and 5 minute. I will discard the 30-minute timeframe (that other authors love so much (sorry guys)) for practical purposes here. Also, and for the purposes of this session, we are going to focus on combinations that take intraday/short-term timeframes into account.

The basic rule would be (in text it may sound either a bit naive or nealry sky-rocket science, but I promise that you will see things clearer walking through the charts later) to set the scenario for any pair using, say, the 60-minute timeframe –assume long-, and to use the 10-minute chart to spot the exact entry price. Therefore, you must assume the 10-minute chart will be pointing in the same direction than that of the 60-minute, giving the trade a bit of “extra” momentum, finetuning the entry level and therefore offering a better risk/reward ratio.

The longer the timeframe used to set-up the trading scenario, the more reliable it is. BUT, also it will be more difficult to spot valid entry levels with the short timeframe, as daily momentum is very difficult to be meausred using 10-15 minute timeframes. 1 daily candle is 24 X 6 = 154 10-minute candles and 24 x 4 = 96 15-minute candles. That’s a big time gap, as you may well see a bullish/bearish flip intraday without that having any effect in the daily candle. The time gap is too wide here, and this combination (at least until you do not master this tradinga pporach) should definitely be discarded. Basically you should take into account timeframes that may have a better time gap, for example 60-minute & 10-minute or even the one that the people I know use most: 60-minute & 5 minute. 60-15 would be fine also, but in this case the time gap would be too narrow (just 4 candles) to consider it a true combination. For a 15-m short timeframe I’d rather use 4-hr charts or similar.

For the purposes of this session, I will stick to any possible combination that we can spot off the 60-minute chart being used as the “long timeframe”.

Combining does not mean mixing (a common problem)

Indeed. There is a common issue most novice traders face when they start working out this trading approach. At some point in time the short timeframe goes opposite to the long timeframe. They lose focus and just watch every single pip against them as the price they are paying for doing that “nonsense” of combining timeframes. Then they just close the trade, reverse it (following the short timeframe signal), just to see, a few moments later, that the price resumes its previous direction. They then try to join the previous direction, now thinking it wasn’t that bad the plan they had earlier on, but they hesitate, not sure whether to jump in or not, maybe wait for a bit of a retracement ... and the price goes on and on .....

It may sound like a fairy tale, but this is the real story to many traders every single day. They do not work the multiple timeframe combination approach conciously, but I can assure you they “use” it, not to their benefit though. Here’s what happens to most of the novice traders at least once in their life: the trader sets up a trade based on, say, 60 minute chart, and it goes long EUR/USD @ 1.2045. Then, seeing the trade is not going his direction or barely moving, decides to check other timeframes just to “see” if he has done anything wrong. He sees that 10-minute chart is showing a great opportunity for a short, and thinks that may be the cause for the price not to be moving in his direction. He closes and reverses the trade, and now he’s short @ 1.2039. Price keeps stagnated in a tight range, but our trader is some pips up. He checks the 60-minute setup and starts to think that setup is not worth using it anymore, and that he will change to that he found for the 10-minute, that looks promising and works well for choppy trading. 2 hours later the price is 1.2070. He gets stopped out, but decides not to go long at that price, better to wait for a retracement. The closing level pushes the pair up to 1.2115. I think that’s not too much of a fairy tale.

Do not mix timeframes, but rather combine them. Use the short to optimize entry & exit levels. Use the long to give you the trading direction. Practice and love it. It may well be worth the effort.

Trading Example

To show you how this works I think that the best is to show you an almost textbook case. This way you will be able to get the grip on what I just talked about. Take a look at charts 1&2. Chart 1 shows a recent EUR/USD 60 minute price action. Chart 2 shows the inside action on that price action off a 5 minute timeframe. Looking at the 60 minute chart, we clearly identify a downtrend channel and the price testing the upper line, in what it could turn out to be a great risk-to-reward short entry. But we do not know yet if the channel is going to hold or if the price is going to break it straight away. It is time to turn our eyes to the 5-minute chart, not before, not later, now. We divise the MACD about to trigger a bearish divergence, right in the moment the price is seriously testing the channel’s upper line. Once it is confirmed (the divergence), we check what price is doing: it is ticking below the upper line. Time to join the short train. Thus we have maximized our expectation for this particular trade, and it would’ve been quite difficult to spot a better entry level.

What about the exit? Keep on reading the charts. As trade progresses and pair breaks the 1.2015 (tough static support/resistance) level, the MACD on the 5-minute chart starts to post a bullish divergence (can you spot it?). Well, there you have it. Once that bullish setup in the 5-minute chart is confirmed, trade is closed. Obviosuly this is a very basic scenario, but keep it simple all the time and you’ll see yourself being rewarded. So this simple exit strategy may work most of the time.

Sometimes the exit strategy (depending on the one you use) can take you out of the trade too early. Those who do not like thiss trading apporach will undoubtedly tell you this. This can also be improved but it would be the object of another session. But I can assure you that with this simple approach you will be making yourself fully available to around 80% of the trades.

good stuff from http://transcripts.fxstreet.com/2006..._effectiv.html

any, the time frame that is used in news release.

Tricky one for me, I said one hour. But really it depends how I'm trading that day. News is obviously shorter time frame charts. But if there's no news I try to stick with 1h to 4h. Unless there is huge action on the 5-15 min charts (40+ pip moves).

If I have the daily going with the 1h-4h, I sometimes let the trade run a couple days. I've been trying to get into longer time frames. But I Figure the more I trade the quicker I'll learn more about the market. I want to do it all, probably why I have so much stuff on my charts, to be prepared for any market condition or time frame.

I used to trade 4Hour and daily candles, but now I feel very confident trading 30 minute and 1hour charts.

The 4H is my favorite chart, aiming for between 50 to 80 pips per move. However I do take intraday trades off the Hourly chart. Anything lower than that drops my win/loss ratio (I still havent figured out why) and occasionally I trade off the Daily, even though it's too long of a time frame for my taste.