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Illusion of Time(frames)

  • #1
  • First Post: Nov 23, 2011 1:28pm Nov 23, 2011 1:28pm

  1. Conventional Timeframes: 1m, 5m, 15m, 30m, 1h, 4h, D, W, M, Y...

  1. Custom Timeframes: 1m+25sc, 1h25m, 5h, 2D,....


There is just no limit whatsoever as to the timeframes you can make and trade, yet all timeframes show the exact same things.

If markets are nothing more than a continual exchange of money, then where do all these different timeframes fit into place?


What the hell does a 1h TF have to do with a massive order placed 24seconds ago?
By using TF's arent we constantly trading the 'past' yet to be succesful arent we supposed to trade the 'now' (in context)?

Markets are not about time, but about price; buyers and sellers, bidding/asking, a constant flow of orders non stop...Yet we use all sorts of different timeframes to interpret this one unique constant reocurrance happening right now, not 1h ago, not a week ago....but 'NOW'.

If timeframes are a mere illusion (confusing/misleading?) then:

 

  1. What exactly is the true purpose/use of a timeframe?

  1. Do we need these TF's to trade? (i have a suspicion we dont).

  1. What gives a timeframe more importance than another (spreads aside)?

  1. What exactly is a REAL consistent pro trader looking for on a chart?


There are four things (that i understand so far) that occur in the 'now', and that is:

- strong directional moves.
- strong non directional moves.
- weak directional moves.
- weak non directional moves.

If this is true (which its probably all wrong anyways ) then why do we need so many timeframes, confluences, and what not ninja tecnical patterns for?

  • #2
  • Nov 23, 2011 7:26pm Nov 23, 2011 7:26pm
There is a secret (I shouldn't be using the word secret, but it is a secret). In the past they discovered that as long as you "buy above a line and sell below a line" that you actually have a greater statistical edge. Now this statistical edge was never released, and will never be released to the public. In discovering this powerful concept, they invented.... drum roll... The Candlestick.

Attached Image



Have you ever wonder, when you have a line graph, why in the hell would you invent the candlestick!!! ?
Clever Japanese people, they never did tell you why they invented it in the first place. Decades had past and then candlestick patterns were published... but this is not as powerful as the main core concept of the simple candlestick

Attached Image (click to enlarge)
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I love your post... now you are starting to get rid of all the fluffs. With the right questions you should be heading in the right direction

  • #3
  • Nov 23, 2011 10:56pm Nov 23, 2011 10:56pm
I agree OP, thinking rigidly in a 'specific' time frame and you'll get mediocre results.

For me as a pure TA trader, charts are there for an eyeball of what price is doing at that time. I have a MT4 chart from my main broker plus another MT4 chart from a different broker, I try and take an average of what price is trying to do and make a decision there and then ... not perfect but what can you do?

Interesting topic, it'll be good to see how this thread develops.
  • #4
  • Nov 23, 2011 11:35pm Nov 23, 2011 11:35pm
If you believe that timeframes are an illusion, then find and apply technical tools that are timeframe-independent.

Quoting CrucialPoint
Have you ever wonder, when you have a line graph, why in the hell would you invent the candlestick!!! ?
Candlesticks depend upon timeframes for their very existence.
  • #5
  • Nov 24, 2011 12:08am Nov 24, 2011 12:08am
Quoting CrucialPoint

Have you ever wonder, when you have a line graph, why in the hell would you invent the candlestick!!! ?

Also, line charts don't show the full range of price from high to low. More information in a candlestick or bar chart
  • #6
  • Nov 24, 2011 4:27am Nov 24, 2011 4:27am
I thought all markets were dependant on time.

Market Open, Market Close, News Events, People Speaking etc.
It never gets easier, you just get better
  • #7
  • Nov 24, 2011 4:53am Nov 24, 2011 4:53am
Quoting Shabs19
I thought all markets were dependant on time.

Market Open, Market Close, News Events, People Speaking etc.
That doesn't make the timeframe of a chart relevant though. If price moves 50 pips on a news event (or for whatever reason) it doesn't matter whether you are looking at a daily chart or a tick chart, price has still moved 50 pips.

Open and closes of markets can be important (in terms of liquidity/volatility), but open and closes of candles are irrelevant. I do think the highs and lows of the candles are relevant though.
  • #8
  • Nov 24, 2011 5:00am Nov 24, 2011 5:00am
Trendlines couldn't be drawn unless you have a time based chart, all technical analysis would be almost redundant.

I suppose Renko / Range Bar charts you could use instead of time based charts.
It never gets easier, you just get better
  • #9
  • Nov 24, 2011 5:01am Nov 24, 2011 5:01am
i was going to post this on my thread but that is another tool i use, thanks to Crusial point

candles measure, Range, speed, and conviction of traders, however the best tool it offers is a reference point

in fact when looking at any so call time frame, which in fact do not exist, because as we know what matter is the BID/ASK and any order block can upset your analysis.

the most important information there is the Open, as you know in forex, the probabilities work against you.

however, by narrowing down your bias then automatically you turn those possibilities 50/50

price will close above or below open.

pick the most likely scenario instead of catching all the waves
AVT INVENIAM VIAM AVT FACIAM
  • #10
  • Nov 24, 2011 5:11am Nov 24, 2011 5:11am
Quoting the redlion
the most important information there is the Open, as you know in forex, the probabilities work against you.
I agree with your post, but in regards to the open, i don't think the open of a candle on any time frame makes a difference. The reference could be price when you sit down at your computer, it doesn't need to be the open of a candle on any timeframe
  • #11
  • Nov 24, 2011 5:12am Nov 24, 2011 5:12am
Quoting havaiana
I agree with your post, but in regards to the open, i don't think the open of a candle on any time frame makes a difference. The reference could be price when you sit down at your computer, it doesn't need to be the open of a candle on any timeframe
true, but then how do you keep track of usual price behavior and usual ranges?
AVT INVENIAM VIAM AVT FACIAM
  • #12
  • Nov 24, 2011 5:14am Nov 24, 2011 5:14am
i hold the opinion that you gotta know what is plausible and what is probable before you realize you might be wrong.
AVT INVENIAM VIAM AVT FACIAM
  • #13
  • Nov 24, 2011 5:17am Nov 24, 2011 5:17am
Quoting Shabs19
Trendlines couldn't be drawn unless you have a time based chart, all technical analysis would be almost redundant.

I suppose Renko / Range Bar charts you could use instead of time based charts.
I think alot of technical analysis is redundant.

What if you had the highs and lows in the order that they ocurred but did not have the time they occurred, would it make much difference?
  • #14
  • Edited 5:39am Nov 24, 2011 5:28am | Edited 5:39am
Timeframes and charts and everything else...

They are tools to help the human mind grasp and deal with the complexity of the markets. We are not computers and we can not deal with raw data feeds. There is too much information and we need to simplify it and package it in a form that is compatible with our minds.

The question about the time frame not if they are "true" but if they are helpful. If they are not, don't use them. Sure, cracks exist in the matrix... but is staring at them going to make you more money?

In this way a time frame is similar to a watch. It is of course ridiculous to arbitrarily divide the now into seconds and minutes. And why 60 minutes in an hour? What a dumb number. Why not 100 or 10? However, banning the false prophets of clocks is going to make the world less efficient rather than more.

A much more practical thing is to learn how to read multiple time frames while looking at one time frame. For example, if you are watching the 5 min, every third bar a 15 min bar forms. You could flip to the 15 min.... but why not just look at the open of the bar before the last one and the close of the current one.

A Buddhist may argue that he does not exist... however he still prepares his meal so that he can continue to "not exist".

A bit more... Opens are significant not because they are an "open" and have any inherent truth but because they exist as a real event in the minds of traders. And since the minds of traders drive the actions of traders and the actions of traders drive the markets.... every open has a disproportional influence on market movement compared to PA in the second immediately following it.
Kill the ego, or it will kill the mission.
  • #15
  • Nov 24, 2011 5:44am Nov 24, 2011 5:44am
Good back to basics questions Pip.

What exactly is the true purpose/use of a timeframe?
>> To filter the mass of information because looking at a tick chart is too granular. Or, to look at it in the same way as other participants who are making their decisions based off charts

Do we need these TF's to trade? (i have a suspicion we dont).
>> No. But given it contains useful information, don't throw the baby out with the bathwater

What gives a timeframe more importance than another (spreads aside)?
>> Universality - 5m,30m,60m are the same worldwide and duration - ie the longer a level be it a reversion to mean level or s/r holds, the more participants must be observing it, therefore the more important it is.

What exactly is a REAL consistent pro trader looking for on a chart?
>> Same as everyone else. Where are other traders orders (mental or actual). Is price behaving consistently with my trade ideas or not? Where is price relative to important level X.

To give you some ideas, if you want to get people to follow you, you might consider faking a move on a popular timeframe. Cheeky.

And finally, you said if a massive order is placed x time ago. Massive orders are rarely slammed in - they're worked in either across a price range or by sitting and repeatedly hitting at a level. In the latter instance, again, duration = volume. This is of course one of the cornerstones of market profile.
  • #16
  • Nov 24, 2011 5:54am Nov 24, 2011 5:54am
Quoting the redlion
true, but then how do you keep track of usual price behavior and usual ranges?
I just look at where price is in relation to the highs and lows of the most recent ranges, the time they occurred does not matter to me that much.

I could (in theory) just sit in front of the screen at any point in time though and wait for the market to make it's first low and high, then i would have my reference points.

Contradicting myself here from what i said earlier, but i do actually use time to measure momentum now that i think of it

Quoting AaronWard
A bit more... Opens are significant not because they are an "open" and have any inherent truth but because they exist as a real event in the minds of traders. And since the minds of traders drive the actions of traders and the actions of traders drive the markets.... every open has a disproportional influence on market movement compared to PA in the second immediately following it.
True, it would have some influence, but too assume it has much of an influence is assuming that most of the money flooding in to the market is also looking at your same open. on your same timeframe

As Pipalicious put it, "What the hell does a 1h TF have to do with a massive order placed 24seconds ago?"

Same with the open, unless the traders pushing the buttons on the big orders are watching the same open as you it will make no difference. I just think that most of the money coming into the market couldn't care less that they are trading into the 1 hour candle open price.
  • #17
  • Nov 24, 2011 6:04am Nov 24, 2011 6:04am
Quoting havaiana

As Pipalicious put it, "What the hell does a 1h TF have to do with a massive order placed 24seconds ago?"

Same with the open, unless the traders pushing the buttons on the big orders are watching the same open as you it will make no difference. I just think that most of the money coming into the market couldn't care less that they are trading into the 1 hour candle open price.
If the person who placed the order was autistic, did not have a chart and knew nothing about markets... very little. I am afraid that most of the billion dollar orders come from somebody who has a chart, know a lot about markets and is not autistic.

You can be certain that anybody that is serious about intraday trading (ie everybody with a big order they need to place today) pays very close attention to the opening hour, to the one day candlestick and probably the 4 hour candle stick.

Obviously all opens are not created equal. Every 4 hours creates a new open on the 4hour chart and all the other lower time frame charts. So it is far more important than the open on a 5 minute chart.
Kill the ego, or it will kill the mission.
  • #18
  • Nov 24, 2011 6:14am Nov 24, 2011 6:14am
Quoting AaronWard
If the person who placed the order was autistic, did not have a chart and knew nothing about markets... very little. I am afraid that most of the billion dollar orders come from somebody who has a chart, know a lot about markets and is not autistic.

You can be certain that anybody that is serious about intraday trading (ie everybody with a big order they need to place today) pays very close attention to the opening hour, to the one day candlestick and probably the 4 hour candle stick.

Obviously all opens are not created equal. Every 4 hours...
If you were talking about obvious highs and lows where orders congregate i could see your point. You really think XX bank gets a large order from a corporate client, or Paul Tudor Jones wants to make a trade and they quickly go check the open of the last hour candle?

I disagree, so i must just be autistic
  • #19
  • Nov 24, 2011 6:18am Nov 24, 2011 6:18am
there is some merits to both arguments.

most traders try to make sense of the influx of money hitting the books.

so they might check on the opens, highs, lows, close of the month
day, hour, etc... they think will bring them an edge

but xx bank or institution hitting that order book, will definitely screw with the terrain that NOW just changed esp if others follow, so it does have an impact, but it can change any minute
AVT INVENIAM VIAM AVT FACIAM
  • #20
  • Nov 24, 2011 6:28am Nov 24, 2011 6:28am
Quoting havaiana
As Pipalicious put it, "What the hell does a 1h TF have to do with a massive order placed 24seconds ago?"

Same with the open, unless the traders pushing the buttons on the big orders are watching the same open as you it will make no difference. I just think that most of the money coming into the market couldn't care less that they are trading into the 1 hour candle open price.
Why set counts with ticks, in range bars, or for time are done is beyond me. Lack of public information, I guess.
I'd rather have the option of spacing one of them on when news happens or, as you say, on the density, or count and size, as well as change in price, of orders. Or a chart scale based more on weekends or sessions, when the count and size of orders dramatically changes.

Also, about more info on any of these chart scales:
The lower a TF, the more you have to deal with randomness. On the other hand, the more you understand randomness, the higher the W:L rate. Which makes lower TF's at least a good training ground.
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