1 min charts lead the rest? And buying/selling pressure on indices?

[Have a nice day trader]

My friend and I have had a debate going for years now. It's safe to say our market beliefs differ. It would be interesting to hear some different opinions about the following subjects.

1) My friend insists that the one minute chart "leads" the other timeframes as in the one minute chart will "turn" before the others and so moves first leading the price on the higher timeframes. My belief is that all timeframes move the same amount at the same time so it's nonsense to suggest that one timeframe leads the other as he suggests. Yes the one minute may turn first in a multi month decline but it's not predictive in any way, you don't know what's going to happen next so it's of no practical use.

2) Also he keeps talking about "buyers" and "sellers" when trading the dax. To my mind the dax price is made up of a complicated calculation but at the heart of it is the market capitalisation and long term order volumes of the 30 shares in the index. So is it logical to suggest that "buying pressure" on the index itself would affect the price of the index? Would a big player placing a large buy trade in the dax push the price up? I have my doubts unless the order volume aspect of the dax calculation would be altered by such an order.

3) It certainly seems that the dax respects traditional technical analysis on the one minute chart including trendlines, horizontal support and resistance, etc quite well which combined with htf momentum analysis works fine for me. I will only trade when the htf momentum lines up so 4 hour, 1 hour and 15 min all moving the same way with some basic momentum analysis. My friend believes htf analysis is not necessary and some random moving averages can be used to trade in the direction they are moving without reference at all to htf momentum. I know time will tell in the results on this one but opinions appreciated.

Thanks for your time considering this. Please keep answers constructive and no smart alecs!

 

[Turveyd]

1. Yes it leads, but nothing ever is predictive, momentum is your only chance, there is short and long term momo.

2. Although DAX is an index it trades and moves based on buyers and sellers, its not accurate index it just tracks vaguely as far as i can tell.

3. I trade dax samevas your friend, dont like multitume frame anaylsis at all.

 

[Have a nice day trader]

Yes I agree with momentum being the only thing that helps. Interesting about the dax, I just wasn't sure the index was that loosely based. I find the mtf analysis makes it easier to predict momentum on the lower timeframe. Each to our own I suppose and as I say we'll see in time who does better with that one.

 

[Turveyd]

Mtf i find no edge from it, you just end up taking less trades.

 

[Have a nice day trader]

My way of thinking is just that after a pullback in a 15 minute trend you can reasonably expect a 1 minute trend in that direction. May or not play out that way but increases your chances of finding something worth trading I think? I know some people can jump in and out in any type of market and make money but I do a lot, lot better in trending markets or at least markets that are tending to move one way rather than the other whether in a smooth trend or otherwise.

It would be great if you could give a brief outline of your approach if you wouldn't mind? Not the whole system but a summary? I have my ideas which work quite well for me but always interested in other ideas.

 

[Xela]

My friend insists that the one minute chart "leads" the other timeframes as in the one minute chart will "turn" before the others and so moves first leading the price on the higher timeframes.

That's technically true by definition.

What it signifies and implies (if anything) about which charts one should trade from is, of course, a whole different matter.

My belief is that all timeframes move the same amount at the same time

You might perhaps want to re-examine that belief? It's technically untrue, also by definition.

Yes the one minute may turn first in a multi month decline

It will turn first, in any decline (or in any rally) - again, by definition.

but it's not predictive in any way

No; of course not. That's why the entire conversation, thus far, is somewhat academic and sterile.

Also he keeps talking about "buyers" and "sellers" when trading the dax. To my mind the dax price is made up of a complicated calculation but at the heart of it is the market capitalisation and long term order volumes of the 30 shares in the index. So is it logical to suggest that "buying pressure" on the index itself would affect the price of the index?

Not only is it logical, but it's also true.

Price movements of the index are caused by imbalances between buying pressure and selling pressure of the index. This is simply factual.

It certainly seems that the dax respects traditional technical analysis on the one minute chart including trendlines, horizontal support and resistance, etc quite well which combined with htf momentum analysis works fine for me. I will only trade when the htf momentum lines up so 4 hour, 1 hour and 15 min all moving the same way with some basic momentum analysis. My friend believes htf analysis is not necessary and some random moving averages can be used to trade in the direction they are moving without reference at all to htf momentum. I know time will tell in the results on this one but opinions appreciated.

I think you need to define "HFT momentum" very unamibguously, and explain exactly how and on what basis you're measuring it, before people can realisitically offer opinions on that one.

Please keep answers constructive and no smart alecs!

I certainly hope I haven't come across that way! It seems to me that (with the exception of your last point, which needs to be more clearly defined) everything else you've mentioned is simply factual and entirely objective, and ought to be uncontentious, really?

 

[Turveyd]

I keep it really simple M1 only 6sma envelopes 0.01 & .0.03 so tiny and 13sma 0.06 when i see strength in jump in with the 6, when i see chop i play the 6 0.03 or 13 0.06 range.

I would only trade chop, so took the chop away, mastered the trend, just put chop back see if i can better decide which to use.

Fun fun fun

 

[Xela]

I keep it really simple M1 only 6sma envelopes 0.01 & .0.03 so tiny and 13sma 0.06 when i see strength in jump in with the 6, when i see chop i play the 6 0.03 or 13 0.06 range.

I hope you won't mind my mentioning, though, Turveyd, that whenever you mention what you're doing, yourself, in such threads, it turns out to be something completely different from what you were doing not long before.

Absolutely no impoliteness intended in pointing this out, I hasten to add, but it's clear that you've tried many different systems and methods over the last couple of years, and at any given moment apparently abandoned all but one of them. You seem even to have abandoned a highly valid method on which you commented a few months ago, from which a friend of mine - an ex-instutional trader - has now been making her full-time living very steadily for a couple of years (it was one of your Bollinger-Band-based methods.)

 

[Scataphagos]

1) My friend insists that the one minute chart "leads" the other timeframes as in the one minute chart will "turn" before the others and so moves first leading the price on the higher timeframes.

The one-minute appears to be more dramatic vs. longer time frames, but they all "turn" at exactly the same time and price.

 

[Have a nice day trader]

My belief is that all timeframes move the same amount at the same time

You might perhaps want to re-examine that belief? It's technically untrue, also by definition.

What I meant by that was simply that when the 1 min chart goes up 10 points so does the monthly and every other tf in between.

That's why the entire conversation, thus far, is somewhat academic and sterile.

Sorry bout dat ;-)

Also he keeps talking about "buyers" and "sellers" when trading the dax. To my mind the dax price is made up of a complicated calculation but at the heart of it is the market capitalisation and long term order volumes of the 30 shares in the index. So is it logical to suggest that "buying pressure" on the index itself would affect the price of the index?
More...

Not only is it logical, but it's also true.

Price movements of the index are caused by imbalances between buying pressure and selling pressure of the index. This is simply factual.

Ok, I'm completely convinced of this now, it's simply a case of knowing that the index calculation is more fluid than I thought it was and not simply about market capitalisation of the individual companies.

I think you need to define "HFT momentum" very unamibguously, and explain exactly how and on what basis you're measuring it, before people can realisitically offer opinions on that one.

Quite simply you could use almost any measure of htf momentum and it still give you a bit more of an idea of which way you can reasonably expect the price to go on the 1 min chart. How about a few to be getting on with... 20 sma moving the same way on 4 hour, 1 hour and 15 min..... heiken ashi smoothed? cci? Even stochastics?! If it's all moving the same way on multiple timeframes it's telling you something? I just prefer for something to line up like that or leave it alone. Or just be a lot more careful with trades and take profit quicker.

I certainly hope I haven't come across that way! It seems to me that (with the exception of your last point, which needs to be more clearly defined) everything else you've mentioned is simply factual and entirely objective, and ought to be uncontentious, really?

Never a smart alec and always constructive posts, thanks for taking the time!