Illusion of Time(frames)

Quoting the redlion

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...but to look at the STRENGTH OF THE MARKET IN RELATION TO TIME AND PRICE, higher time frames give you a better picture

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Quoting Conceptual

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When this really sinks in, send me PM and thank me later - deal?

a) When a larger bar of data is new, the smaller time frames give you the best picture.

b) When the smaller bars of data are old, the larger time frames give you the best picture.

It is somewhat counter intuitive, but if you study it, you can build an entire trading system based on those two facts alone. And, a pretty good one, too.

The question is: Who is in control of the big show?

- The Multi-Year Bar
- The Annual Bar
- The Quarterly Bar
- The Monthly...

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Quoting Conceptual

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Patterns are visible because of Time. Remove Time, and the fabric that contains Pattern, disappears. The dimension of Time, is important to draw out the patterns that do exist. Without Time, there can be no progression of price from one level to the next, because it takes "Time" for price to progress in the first instance.
Trying to extract Time, from the equation of the Universe (in which we trade) is not possible, nor practical. Time provides the framework within which we conduct our business on a daily basis.
Long live the dimension of...

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Quoting Iamfx

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The Heisenburg Uncertainty Principle

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Quoting PrymeTyme

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they fit in each personals traded TF, not all trade 8 hours a day and scalp, there are longterm traders and there are shortterm traders

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Quoting PrymeTyme

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the constant flow is generated by people trading off the small TFs till a longterm TF trader steps up as they see value now! for ex.:
two one minute traders tarde on therw own till a 5 min tarder sees value in price (fair/unfair) then the 1min tarders trade against him etc..a never ending cycle..

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Quoting Pipalicious

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I do agree with what you said in these 2 comments of yours:

 

1. Time(frame/s) allow us to measure momentum/exhaustion. Without time, how can we possibly measure this?

1. Traders who trade long term (with floating profits) allow smaller TF traders to profit:
   A 5m trader with his open floating profits allows a 1m trader to profit from him/her.

1. We are all competing/fighting for the exact same floating profits.

But, for trading purposes, i still think having many timeframes overcomplicates...

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The key to understanding market-generated information lies in
organizing the seemingly chaotic, seemingly random market activity
into meaningful, measurable data segments which can be captured,
defined and then monitored. This provides a sound basis for interpreting
the price data and allows a person a sound decision-making
process - to act or not to act. Thus, market-generated information is
nothing more than a time-series plot of transactional data: price data
plotted over time, formulated into a format which lends itself to
statistical measurement and comparison.


The equation is simply: price + time = value. This statement is known
and even obvious to most intelligent persons; subconsciously we accept
a known product's price as value as we repeatedly are charged that
price over time. The equation also holds true for the most complex
markets. It captures and defines a market's range of activity, creating
a distinction between prices which are accepted as fair value and those
prices which the market rejects as temporarily unfairly above or below
value in the current timeframe.



VIII. Market activity is an expression of participant need, triggered by:
A) market-imposed timeframes
B) participant time frames

I) A market's volatility is dependent on the mix of long and short
market-imposed and participant timeframes.

IX. Market activity generates information:
A) A readable preference of variant time-price opportunities which
occur at different times, at different or the same prices, at
different or the same levels of volume. This is an expression of
accepted, rejected or changing value by participants as a whole.

I) Time-price opportunities (and hence prices) can appear with a
large or small relative amount of time.

a) Those time-price opportunities resulting in a large amount of
time must result in large transactional volume and display
market acceptance or value for both sides in that timeframe.

b) Those time-price opportunities resulting in a small amount
of time must result in small transactional volumc and display
market rejection or unfair value for one side in that
timeframe.


B) This amounts to market distinction as to price.
I) prices accepted versus prices rejected
C) A further distinction of the type of market activity can be made within
the framework of acceptance/rejection.

I) prices in a market-created opportunity which arc responded to
versus prices in a market-created opportunity which arc
overtaken by other initiating forces. 
Therefore, Price + Time; Market Acceptance (responsive or initiating)
; Transactional Vol ume
; Market Value (definition of all free markets)

X. All markets, although they may be structured differently (dealership,
auction house, exchange market, etc.) arc nevertheless motivated by
the same forces, and operate based on these basic principles.

A) traders and investors should understand sound market logic so
that they can extract and read market-generated information to
satisfy their particular needs in every marketplace.



III. Activity Levels for timeframes are as follows:
A) Short timeframe participant activity usually makes up most of the
transactional volume in a given timeframe.

B) Long timeframe participant activity usualJy makes up a smalJ
amount of the volume in the same timeframe.

I) Anxiety level for a short timeframe participant ranges from
acti ve to passive.

2) Anxiety level for a long timeframe participant ranges from
passive to active.

3) Total mix of volume wilJ be a blend of these circumstances and
will affect the market's structure accordingly.

IV. Regardless of whether prices are in an excess, or are facilitating
trade in the short timeframe, a market-created opportunity which is
attractive to a long timeframe buyer wilJ not be attractive to a
long timeframe seller. 
Thus, desire for participation for a long-term buyer 
and a long-term seller are opposite at the same price, 
at the same time. Therefore, long-term buyers almost never
buy from long-term sellers. Thus, no market exists which is composed
solely of long timeframe participants trading with one another.

V. Where prices are facilitating trade and are thus fair in the short
timeframe, a price or price area which is attractive for a short timeframe
buyer will be attractive to a short timeframe seller.

VI. The normal trading pattern has the short-term trader transacting
business with the long-term trader, yielding various buyer-seller
combinations: long timeframe versus short timeframe. Each
combination transacts business in varying quantities throughout the
structure of the range.

VII. Participants can and will change their timeframe depending upon the
situation as it relates to their needs. The effect of this is to
increase or decrease market activity.

A) Long timeframe participants, when they decide to abandon their
posture of only trading with an advantage and trade in the short
timeframe, become short time frame participants because their needs
and goals as expressed in market activity become identical to
those of other short timeframe participants. This increases
market activity.

B) Likewise, when long timeframe participants extend their timeframe,
market activity is decreased. Further, when a long timeframe
participant passes up a market-created opportunity, market
activity decreases.

C) When the short timeframe participant lengthens his timeframe, he
becomes a long timeframe participant, decreasing activity.

D) When the short timeframe participant shortens his timeframe,
activity increases.

E) Regardless of timeframe, those who have initiated positions in
nonconsuming markets may look to exit the positions over either
timeframe.


The promotional ability of excess price and the hidden brakes
inherent in every marketplace can be illustrated by a business custom
existing in most Western cultures, the " post-holiday sale. "
During this period, most department stores substantially 
discount merchandise not sold at regular prices during the holiday season
 which for the retailer is the period of greatest inventory demand
 due to a great supply of buyers.  Store management realizes that after the 
holiday season a shortage of buyers exists
 and merchandise not sold at regular preholiday prices will not move quickly. 
The retailer's primary goal throughout the year is to be quickly rid of slow-
moving inventory which is costing interest, storage and insurance while 
always increasing liquidity. 

Hence, merchandise is repriced downward:. Furthermore,
merchandise will be sold only if repriced at enough of a discount to
attract so-called bargain hunters. 3 Thus, every post-holiday sale is a
market's use of a "purpose (low excess) price " designed to move old
inventory not sold during the holiday season. The retailer is willing to
promote his leftover inventory through an excess low price, since only
the excess price reduction will accomplish the goal.


As for this market's hidden brakes: Shoppers perceive these new
lower prices as bargains because for the months leading into the
holidays, these same items cost much more.

 For example, a shirt whichhad sold for $50 for the previous nine months,
 offered after the holidays for $25, gets participants to react. They realize 
they're buying price below the value established over the prior months.
 (Thus,shoppers have an association of price over time equaling value, not as
an acknowledged and articulated principle, but rather as a perceived,
almost unconscious insight.)
 The hidden brake which prevents the shirt from selling for $10 is the self-
interest of the retailer, who assumes that 50% off will be as much of a price
 excess as he needs to fulfill his goal in the time allocated.

Thus, while low price excess attracts consumers, high price excess
attracts producers. Another example of price excess promoting activity
- this time a high excess and hence promoting activity among
producers - can be seen in land values and prices hotels can charge
when a new demand for hotel rooms is created. 

The management of seasonal motels located in resort areas expects strong 
demand which allows charging the highest prices only during the seasonal 
periods.

Illustrated in chart form (the price charged per room against time),
these seasonal periods represent the market high and a brief time
relationship as well, while the remainder of the year, the " off season, "
represents the lower average price.

Time

Time, the market component few participants rely on when making
trading decisions, illustrates the degree of change between need and
price in the marketplace.

 It is a known constant, a measurement whichparticipants inadvertently use 
when determining value through transactional data. 

Time impacts trade by regulating the duration during
which buying (consuming) and selling (producing) can take place.
The market, in facilitating trade, uses price to promote opportunity
and uses time to regulate it. 

In other words, the market uses time to regulate how long a given opportunity
 will be available, insuring that when price promotes opportunity to the point 
of reaching excess, that price is held in check. The market continually uses 
time to regulate itself throughout its structure. 

In other words, time at a given price yields volume, which the market equates
 with value. Everything else being equal, the more time at a price or price 
area, the more transactional volume, and the more value.

Examples of how time regulates price activity are illustrated in both
the examples previously used to illustrate how price promotes activity.

In the post-holiday sale, while the department store management was
willing to sell at prices half of those charged prior to the holidays,
management was not willing to offer this ' 'below value" opportunity
for long, but only until the current inventory is sold. 

Had the store extended the opportunity to purchase merchandise into what is
 considered the regular shopping season, the lower post-holiday sale prices
would soon be considered the new value area. 

This is something no retailer would want to see. Retail stores and other 
producers/sellers use the lower excess price to promote activity only so long 
as it fulfills the purpose behind the excess price. Interestingly, the sharper the
 price reduction - or the farther the price offered is below value - the shorter
the time period during which the opportunity will be available.

Likewise, the example of the resort hotel illustrates that time
regulates activity. In that example, higher price promoted activity
among producers, thereby attracting new hotels. 

The high prices charged first by the lone hotel and then by the new hotel 
market entrants were in hindsight an excess which occurred only until the
demand for hotel space was met and exceeded.
This activity (risingland values and hotel construction)
 continued until it went too high (hotels saturate the demand)
and activity at the high prices was shut off.

Thus, while the hotel near the resort park could temporarily charge
prices considered above value, the market's excess promoted this
opportunity to others, so that the hotel was not able to sustain the high
prices and low vacancy status for long. 

Thus,through a long timeframe,
time regulates the high price activity and controls it.
Both consumer and producer are interested in generating the maximum
amount of activity at the most advantageous price possible.

Thus, in reaching a balance, the market will produce extremes in the
marketplace that will not hold over time, since they will be attractive
for one side, but not attractive for the other. 

In order to balance ,
the market needs to go too high and too low to find an area that is fair for 
both parties over a period of time. It is these excesses on both sides that 
give the market its natural organization and provide information to participants.

When changes in price occur that are so small and subtle that activity
is not shut off, there is no excess in the marketplace, and the market
is in position to trend or show slow and consistant continuation. Thus,
from a relative standpoint the market is either going to be working with
excess or operating with slight, subtle changes.

Conclusion
The components which combine to make up a marketplace interact as
follows: the marketplace controls and regulates itself through its
allocation of price and time, yielding types of natural organization
which, in producing excesses to test market acceptance, produce
balance and provide information.

The obvious conclusion is a major breakthrough for anyone who
understands market logic. The conclusion flies in the face of the
conventional wisdom which says that price is the only mechanism that
the market uses to balance or ration supply and demand.

 (Introductoryeconomic theory asserts this,
econometric models are built assuming it and many investors 
and traders have experienced setbacks believing it. )

 However, when participants focus on price and price alone, they
simply cannot have a market understanding. Thus, an analysis of a
price versus price is inherently narrowly focused and virtually meaningless.

3 It is important to recognize that the retailer' s action in offering lower
prices brings about two events. First, a percentage of the short
timeframe shoppers may extend their timeframe and buy more than the
usual quantity of shirts. Secondly, those long timeframe shoppers who
were uninterested in buying a shirt at the normal price become
motivated to buy at the lower bargain price.

Quoting Pipalicious

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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...

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Quoting pah

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I find the ideas and thoughts regarding this whole subject very interesting. Just to throw one more thing into the mix, please see the attached.

It shows 3 small charts and later I'll tell you what they are. Some of you may know or guess what they're about before then anyway but I thought it would be more interesting to let you have a look over them first.

I've posted them to highlight another major factor to bear in mind when carrying out chart analysis.

Do any of them look better to trade off than the others? Do any of them contain better price...

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Quoting LasVahGoose

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The GMT Offset and how bars print by different brokers maybe interesting, but it is also irrelevant.

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