5 minute chart and emini's

Quote from increasenow:

It seems that most daytrade the emini's off of the 5 minute chart...if you daytrade emini's...please explain WHY you prefer the 5 minute over the 1 minute etc...thanks!!
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The issue has absolutely nothing to do with what most are doing.

Your goal is to find as many trade opportunities as possible and/or use trading tools that allows such to occur when your ready to trade.

Thus, you should be monitoring your trading instrument via different chart intervals side by side on your monitor(s).

I guarantee you will see every trading day a pattern signal on one chart interval and not a pattern signal on a different chart interval.

That's the problem (missed trade signals) you want to avoid when it appears on one interval and not another chart interval especially with easy access to a multiple monitor setup.

I myself prefer the 2min, 3min and 5min chart intervals. They are side by side on my monitor(s).

However, I will add the 1min chart interval to my computer screens during special price action situations (ex. FOMC announcement) to put it side by side with the 2min, 3min and 5min chart intervals.

Simply, getting married to one chart interval as if one size fits all price action conditions will limit your trade opportunities in comparison to watching additional intervals to help ensure you don't miss anything.

Try it and tell me what you think.

Pick one chart interval and trade via it only (no other intervals) for a few weeks.

Next, add a second chart interval and trade via it for several weeks.

Come back and tell me which one produce more trade opportunies.

Also, when you start learning and understanding the price action...

You'll know when particular types of price action requires a different chart interval.

For example, I trade FOMC announcements with different chart intervals in comparison to when I trade a low volatilty (low volume) price action.

Last of all, keep some statistics on the duration (length) of your trades.

For example, if your average trade length is 2mins...

You may want to think twice about using a 5min chart.

However, if your average trade length is 15mins...any interval below 15mins should be suitable.

P.S. I don't like getting married to anything involving trading.

If market conditions change (it always do), I want to be able to adapt so that I can avoid drawdowns or missed trade opportunities.

Mark
 
I like the 3 min for entry with a higher time frame 10 or 15 for filtering, sometimes, even a 30 minute or daily to get a bias and then filter down from there until I get entry on 3. The 1 minute is a joke to me, just noise> I have tried it myself. Tick charts can be good in a fast moving market, which I believe Mark is alluding to with his 1 minute chart.

Let me give you some advice that came from some wise traders. New traders are anxious and feel the need to catch every wiggle of price. I felt that way 2 years ago. They look at a chart and see all that they missed. So they go to the shortest chart to catch every wiggle, problem is that it don't work in real time. They get chopped up. The majority of pros I have communicated with all use a higher time frame chart. It's much easier to see the patterns.
 
Even is one does not use 1-minute charts for price, they can be useful for tracking VOLUME. Often volume will spike at a key area (some key level of support or resistance, or some other pivot high or low). When that happens, it is good to pay attention (on a longer-term chart) and perhaps get ready to enter/exit.

I also use 1-minute NYSE TICK charts as well. But I would agree with most that the 5 minute charts suffice.
 
interesting thoughts on the 1 minute charts: synopsis..the 1 minute is very "noisy" but can show volume...trade off the 3-10 minute chart....anyone trade off the 1 minute chart?
 
The TOS charts is from ThinkOrSwim. I use them as well and think they are very good. I am still a beginner and am trying to learn. I have a question: I see the patterns in your 5 min chart, do you have to use larger stops with a larger interval chart? I use 1, 2, & 3 min but only have a few setups so far I am comfortable with. I use a 5 tick stop but most of the time would bail before that if it wasn't following what I expected.

thanks for the info
 
I favor the 1-minute chart. It may seem more noisy than the longer time frames, but it really depends on what you are looking for. The 1-minute chart accommodates my strategy of low-cost (and reasonably low risk) trades. However, my criteria are fairly stringent - a number of ducks must be lined up in a row to generate an entry signal, so it is not nearly as active as most people would think for someone using a 1-minute chart. Although I wish I could adopt the relatively more relaxed 5-minute chart, I would get very few setups per day, and at a fairly higher cost. Further, the reliability would not be enhanced. And so, I go with what works for me and my method.

I only use price action. In the past I have played with, tested and traded similar approaches with an indicator and even volume. However, upon closer inspection, I found that these other variables only complicated matters for me with no incremental reliability. They were almost as likely to give me either "false positives" or "false negatives" on their own accord. Stated differently, they added no value, at least for my method. A while back, an exchange with another, more experienced and far more profitable trader brought me back, once again, to the basics.

As an aside, I know it is fairly modern to follow multiple time frames for better perspective and reliability. It makes perfect sense to me. However, at least insofar as my own method is concerned, monitoring longer time frames and trading only in their general direction does not seem to enhance the overall reliability of my setups. I wish it did. Rather, using these additional time frames only reduces the number of setups without a compensating increase in reliability. At least for me, that is. I should point out that I am not at all displeased with the present reliability of my current method. Even so, I would gladly improve upon it. As would we all...:)
 
Great post Thunder! Well said.

In the end, it's about what works for you. And until Increase gets to that point, he'll continue to be all over the board.
 
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