Absolute markets as opposed to relative markets such as forex do tend to fall faster than they rise. Is there any advantage for a short term, say 1 min or 5 min chart trader to only look to sell these markets? If you're looking to improve the probability of your trades would this help?
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Absolute markets fall quicker than rise? Any advantage for lower tf traders?
- Thread starter Have a nice day trader
- Start date
One has to be a master-trader to be able to profit consistently well from very small timeframes, it gets easier during periods of high volatility but still no walk in the park.
Is there any advantage for a short term, say 1 min or 5 min chart trader to only look to sell these markets? If you're looking to improve the probability of your trades would this help?
My guess is probably not, overall ... by the time you allow for the fact that they're harder to trade (for most aspiring traders, anyway), and the fact that the markets that do fall faster than they rise are rising for a higher proportion of the time (i.e. trade availability is effectively reduced anyway).
Interesting question, though ... and I might be wrong, too.
Absolutely, the short timeframes allow you to be in and out of the market and it provides more trades, a 1m you can expect 1-2 high probability trades per day, 1s-10s around 7-10 of them. Trading short only is a strategy, collapses generally but not always are faster than the climb, but it makes more sense to be trend neutral as it allows you to see direction in higher timeframes.
The 1m and sub timeframes such 1s, you have very small windows of trade entry, otherwise you get caught up in the whipsaw which are designed to test that you entered at the correct point in time and correct price. Actually that happens at the higher timeframes but you have more margin of error.
Then on top of that you need some serious hardware, the lower timeframes everything recalcs faster and with increased volatility most computers become overloaded freezing, it then takes some time to catch up to realtime, normally when the volatility has dropped. Had the specialists build a special watercooled box with 4x34" widescreens, watching the @CL at 1s and 4tick charts updating in realtiem is a thing of beauty.
Yes it's possible, but most can't, you need sub-conscious training to execute the trades at the very low timeframes with 99.99% accuracy and zero hesitation. Basically 100% confidence in your plan, your hardware, your data feeds, and yourself, otherwise you will miss the entry and exit and be whipsawed out. In essence your entry window is your timeframe, so for 1m you have an optimal entry of 1m, and a secondary entry of 30s. Outside of this your trade probability starts to drop off a cliff which is why most go with 1hr+, they have time to think.
The 1m and sub timeframes such 1s, you have very small windows of trade entry, otherwise you get caught up in the whipsaw which are designed to test that you entered at the correct point in time and correct price. Actually that happens at the higher timeframes but you have more margin of error.
Then on top of that you need some serious hardware, the lower timeframes everything recalcs faster and with increased volatility most computers become overloaded freezing, it then takes some time to catch up to realtime, normally when the volatility has dropped. Had the specialists build a special watercooled box with 4x34" widescreens, watching the @CL at 1s and 4tick charts updating in realtiem is a thing of beauty.
Yes it's possible, but most can't, you need sub-conscious training to execute the trades at the very low timeframes with 99.99% accuracy and zero hesitation. Basically 100% confidence in your plan, your hardware, your data feeds, and yourself, otherwise you will miss the entry and exit and be whipsawed out. In essence your entry window is your timeframe, so for 1m you have an optimal entry of 1m, and a secondary entry of 30s. Outside of this your trade probability starts to drop off a cliff which is why most go with 1hr+, they have time to think.
The insight is sound but there are two currents your swimming upstream into. First, as Xela mentioned there is an upward bias to the market overall. Second, the most a stock can fall is 100%, but it can go up many thousand percent.
You really did miss the point didn't you, this is about short timeframes so will have some fun.
1. Short timeframes don't care about the bias hence -why- they are short timeframes, the difference is that you 'might' get caught in the swing move to make a higher multiple
2. Unless you are talking about penny stocks, over a short timeframe a trading entity will -not- move 1,000%
Which takes the thread perfectly to https://www.elitetrader.com/et/thre...ressure-on-indices.302676/page-4#post-4329532 as with 99% of traders they mix long term strategies (1) with short term timeframes (5), and eventually get the average of (3)!
The bias up hits you no matter what, it's there every minute the market trades, you can just minimize it by not being in the market all the time. The fact that there's limited downside and virtually unlimited upside also impacts you regardless of timeframe. Just pointing out things to look at, not claiming some universal truth and certainly not missing your point.You really did miss the point didn't you, this is about short timeframes so will have some fun.
1. Short timeframes don't care about the bias hence -why- they are short timeframes, the difference is that you 'might' get caught in the swing move to make a higher multiple
2. Unless you are talking about penny stocks, over a short timeframe a trading entity will -not- move 1,000%
Which takes the thread perfectly to https://www.elitetrader.com/et/thre...ressure-on-indices.302676/page-4#post-4329532 as with 99% of traders they mix long term strategies (1) with short term timeframes (5), and eventually get the average of (3)!