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Short Term Vs. Long Term Trading

  • #1
  • First Post: Mar 27, 2011 1:48am Mar 27, 2011 1:48am
Views on the benefits and strategies of longterm trading will be highly appreciated from those who have successfully switched from short-term to longer term trading.

For the past several months I have been working on this but cannot find a way.

Am I missing something?
The Thief of Wall Street
  • #2
  • Jun 12, 2011 12:28am Jun 12, 2011 12:28am
Quoting Chicky
Views on the benefits and strategies of longterm trading will be highly appreciated from those who have successfully switched from short-term to longer term trading.

For the past several months I have been working on this but cannot find a way.

Am I missing something?
No one responded to the above questions for months.

Once again asking the the same question, but let me re-phrase it:

Do you prefer short-term or long-term trading? why?
The Thief of Wall Street
  • #3
  • Jun 12, 2011 1:58am Jun 12, 2011 1:58am
Quoting Chicky
No one responded to the above questions for months.

Once again asking the the same question, but let me re-phrase it:

Do you prefer short-term or long-term trading? why?
Long-term trading.

Reasons: no stress. high R:R's. a high win-rate, because I can also analyse fundamentals. Don't need to sit the whole day in front of the computer.
  • #4
  • Jun 12, 2011 12:36pm Jun 12, 2011 12:36pm
Short Term

less stress. high R:R's. a high win-rate, I can also analyse fundamentals. Don't need to sit the whole day in front of the computer.
  • #5
  • Jun 12, 2011 3:46pm Jun 12, 2011 3:46pm
Quoting newyear498
Short Term

less stress. high R:R's. a high win-rate, I can also analyse fundamentals. Don't need to sit the whole day in front of the computer.
Long term obviously, but if I have time and if an oportunity is good(with agreement with longer term picture) why not to take a test from shorter time frames to let it run into longer term. But it is important not to overtrade. To trade only if there is something tradable and not because I want to trade.
  • #6
  • Jun 12, 2011 4:07pm Jun 12, 2011 4:07pm
I used to trade long term, daily & weekly. Basically trend following.

But for me it was a real roller coaster, emotionally. Watching a 500 pip profit drop by 50% in a day then gain again the next day was just doing my head in. It's the old "Fear & Greed" thing I guess.

I still follow the trend but now primarily on the 4H and take profits as I see fit. I am now much more profitable and relaxed.
  • #7
  • Jun 12, 2011 9:32pm Jun 12, 2011 9:32pm
chickey long term or short term is all the same, price is continuous. there is NO TIME FRAMES.

time frames are artificially created to make sense of how much has price moved according to buy/sell orders for that specific amount of time.

however price moves in waves and there are waves within waves, what does this mean?

the way i look at chart is what has been happening, measuring by longer time frames.

if you are a short term/ swing trader, you notce on the daily price will most likely drop right? then if you are a intraday, price will drop all the same correct however the freshest foot prints are what people call lower time frames.

the market changes with every tick, so the tick will determine the month, not the other way around.
hope i make sense.

do you think that the market is different if youre trading the 1hr or if youre trading the 4hr or the daily?

if u see 1.4444 do you see that same number across the field? or does the euro/usd quote individually for individual timeframes?
AVT INVENIAM VIAM AVT FACIAM
  • #8
  • Jun 12, 2011 10:15pm Jun 12, 2011 10:15pm
Thanks guys,

Think I go it. Now let me share what I think it is:

It's not the hours, days, weeks or months that make it long or short term but number of pips in a trend. Time is irrelevant to the size of a trend. The size of a trend is directly proportional to the market liquidity, strength and persistance of factors moving it.

We have seen market moving several hundred pips in a day and we have also seen weeks, even months of ranges.

Big or small swings have very little to do with time factor, but has much to do with strength of the underlying factors. Indeed makert takes time to move several hundred or thousand of pips, but these moves could either be slow or quick.

Like what we see on charts before and after economic crisis starting in 2007.

Therefore it would be appropriate to focus on Big or Small swings rather than long or short term.

Do you think this makes sense?
The Thief of Wall Street
  • #9
  • Jun 12, 2011 10:20pm Jun 12, 2011 10:20pm
Quoting the redlion
chickey long term or short term is all the same, price is continuous. there is NO TIME FRAMES.

time frames are artificially created to make sense of how much has price moved according to buy/sell orders for that specific amount of time.

however price moves in waves and there are waves within waves, what does this mean?

the way i look at chart is what has been happening, measuring by longer time frames.

if you are a short term/ swing trader, you notce on the daily price will most likely drop right? then if you are a intraday, price will...
Thanks Redlion, That makes lots of sense.
The Thief of Wall Street
  • #10
  • Jun 12, 2011 10:22pm Jun 12, 2011 10:22pm
I've heard it said that since price doesn't know what time frame its on, we should only trade and concentrate on just one time frame. Choose the one you want and stay with it. Would you concur?
  • #11
  • Jun 12, 2011 10:25pm Jun 12, 2011 10:25pm
Quoting FrenchCuff
I've heard it said that since price doesn't know what time frame its on, we should only trade and concentrate on just one time frame. Choose the one you want and stay with it. Would you concur?
Let me articulate it differently.

1. One person trades on smaller time-frame
2. Second person trades on bigger time-frame

The question is who has greater advantage?
The Thief of Wall Street
  • #12
  • Jun 12, 2011 10:28pm Jun 12, 2011 10:28pm
In my experiece - the second person
  • #13
  • Jun 12, 2011 10:30pm Jun 12, 2011 10:30pm
However, my question is can the market be traded just as well using only one time frame?
  • #14
  • Jun 12, 2011 10:36pm Jun 12, 2011 10:36pm
i'm just an unprofitable pleb...

but, how could it be possible that a higher timeframe is ever better than a lower timeframe? a higher timeframe is made up of the lower timeframes. if you look at a higher timeframe you have lost all of the data in the lower timeframes that made this higher timeframe exist.

the resolution is all wrong.

but then on the flipside, and many will argue it both ways, is there a resolution (timeframe) that contains information worth knowing (or not knowing)? that is the question everyone really wants to know the answer to. next you will hear how the "big boys" only trade weekly, no daily, no hourly, no 15min, no 1min... no they scalp.

same old circular questions without answers, really.
Congratulations ScalaFX for coming out of the closet!
  • #15
  • Jun 12, 2011 10:40pm Jun 12, 2011 10:40pm
Nubcake - I totally agree. That's why I'm wondering if you're just as well off choosing a time frame i.e. 6- hour, and just trade it using your whatever personal strategy?
  • #16
  • Edited 12:35am Jun 13, 2011 12:23am | Edited 12:35am
i personally do multi time frame analysis,

the daily to measure the amount of pips (as chicky said the strength of trend) general direction.

and nubcake is exactly right 1440 minutes in the daily, according to how strong price seems to be traveling in the daily i go in to a split screen analysis

i use the hourly for measurement because my brain works in terms of hours,
to see strength of rejections, pip per hour velocity, or whatever other measurement tool one needs to see the FORCE behind the movement

24 hourly is a daily.
on that hourly for measurement i look at

1 direction
2 market form (ranging, bullish, bearish)
3 true range (how many pips on average is it probable to scratch from the market)

and i plot the open price of the day (if below open the daily candle will be red correct? if above it will be blue? right?
why do i do this to always know exactly where im standing when trading, might not work for some but for me it does.

and i trade off of the 5 minute time frame.

and as i said before price is continuous does not stop, candles only measure the OHLC of the certain time that we are looking at. but if you sit and watch the BEHAVIOUR OF PRICE.

acceleration, loss of momentum correction, i call this ABC, does this over and over again.

as crucial point says between prevalent buying environment there is a delay into the transition, buy orders stop hitting the book as often and as strong then the correction happens.
AVT INVENIAM VIAM AVT FACIAM
  • #17
  • Jun 13, 2011 12:24am Jun 13, 2011 12:24am
Quoting nubcake
i'm just an unprofitable pleb...

but, how could it be possible that a higher timeframe is ever better than a lower timeframe? a higher timeframe is made up of the lower timeframes. if you look at a higher timeframe you have lost all of the data in the lower timeframes that made this higher timeframe exist.

the resolution is all wrong.

but then on the flipside, and many will argue it both ways, is there a resolution (timeframe) that contains information worth knowing (or not knowing)? that is the question everyone really wants to know the answer...
with higher time-frames you can use fundamentals as well to make your decision. Really a major advantage.
  • #18
  • Jun 13, 2011 12:31am Jun 13, 2011 12:31am
will disagree with you there custos.

higher time frames = more predicting less objectivity

the market moves in the TICK, in the now, the orders can change, as the price moves down in the NOW

it will be reflected LATER in your weekly chart

there are approx 7920 minutes in the weekly that is

132 hourly candles
1584 five minute candles

look at the bigger time frames for general direction
but trading of the lower time frames to reduce, risk, and follow the flow seems like its more advantageous

price cannot be predicted, the market is too complex
AVT INVENIAM VIAM AVT FACIAM
  • #19
  • Jun 13, 2011 12:40am Jun 13, 2011 12:40am
Quoting the redlion
will disagree with you there custos.

higher time frames = more predicting less objectivity

the market moves in the TICK, in the now, the orders can change, as the price moves down in the NOW

it will be reflected LATER in your weekly chart

there are approx 7920 minutes in the weekly that is

132 hourly candles
1584 five minute candles

look at the bigger time frames for general direction
but trading of the lower time frames to reduce, risk, and follow the flow seems like its more advantageous

price cannot be predicted, the market is too complex...
yeah man, whatever. if price can't be predicted, then why are we trading. why you look at the higher time-frames, if price can't be predicted? on the one hand you make it sound like there is always a 50/50 chance of price either going up or down, on the other hand you look at the general direction suggesting price can have a bias.

Price can be predicted to a certain extent, and fundamentals combined with technicals are a great way to find low-risk entries on the higher time-frames. Look at what price did when major world events happened and how far and how long price moved.

well, and yes, the market moves in ticks, so what. Not every tick matters. The only things that matter is when major news come out, how they will be interpreted by the market. Then the ticks matter.
  • #20
  • Jun 13, 2011 12:49am Jun 13, 2011 12:49am
that is where i say you are wrong

PRICE IN FACT CANNOT BE PREDICTED.

the market is made up of Tier 1,2,3 banks, central banks, corporations (not necessarily trading but making multi million dollar deal, paying employees etc,) hedge funds, institution, brokers, government policy, professional and retail traders

even turist, people sending money to their families, people liquidating stock into cash,
options, swaps,futures, synthetics, deltas, not only spot forex.

so you are telling me price can be predicted?

however the behavior of price is predictable, the way it acts, i dont know what price will be tomorrow, but why is it that we trade?

because there are certain patterns, and price does have direction according to investor sentiment. a bullish trend is made up of an environment where buy orders are more prevalent correct?

that is why i attempt to follow the flow in the lower time frames, i dont have the capital to move the market so all i can do is follow, and following the freshest footprints is better for me. how do i know what has less risk? according to what prevalent orders are being hit.

price cannot be predicted but the behavior can

i trade of the 5 minute to position my self for the daily movements
AVT INVENIAM VIAM AVT FACIAM
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