Day trading, significant levels, & timeframe

D

dominover

Regarding intraday trading.
I noticed when looking for stocks to trade I try to get them when they are approaching or departing a significant level. Sometimes every stock seems miles away from significant levels at least on the daily timeframe.
Is anyone able to tell me whether or not it's also worth looking at lower timeframes like 4 hours or 1 hour timeframes 4 significant levels when day trading?

Thanks
 
Daytrading means multiple timeframing with timeframes smaller than 1 hour. Because otherwise you miss too much of each move. And as intraday the moves are much smaller than on daily or weekly charts, you must try to catch as much as possible, so closer to tops and bottoms.

The real problem is that, in any move, there are mostly several smaller moves in a lower timeframe. So you will get a lot of fake signals. You have to find out which is the good signal.

For instance if you watch a daily chart that shows a short trend, you will see normally in smaller timeframes several bottoms where you could go long. But reality is that most of these bottoms in the lower timeframe are no bottoms but retracements. So after this small retracement the short trend continues. If you take these fake long signals, which go in general slowly higher, and then suddenly fast lower again, they can cause relatively big losses each time as you probably will only see that it is a retracement when the damage has already been done.

You should check how much you lose on fake entries and how much you make on good entries. If the result is not positive, it means you should be more selective about the entry signals.
Not an easy thing to do.
 
Well you have a eluded to what I am asking, but to put it simply, are 4 hour and 1 hour time frames too much of a departure from a daily time frame to show reliable support and resistance levels.

I realise the lower timeframes you go the less reliable they are. I'm wondering which timeframe is the lowest that day traders would use to look at levels which may carry some significance (volume pending of course).
 
I day trade futures.

I seldom look at the day charts.
I don't draw any significant level on it.
I don't draw horizontal lines on my various volume-based charts.

Years ago, I used to draw thousands of horizontal lines till I could not see the candlesticks.
 
dominover said:
I realise the lower timeframes you go the less reliable they are. I'm wondering which timeframe is the lowest that day traders would use to look at levels which may carry some significance (volume pending of course).
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Which timeframe to choose depends on your system. You should test what works for you. Each trader has a different system, so nobody can give you the optimal settings that will work for you.
To me the biggest timeframe to use would be 60 minutes. Just to define the trend. The lower timeframes are used to optimize the entries.
 
Are levels found on the 4 hour chart reliable enough?
Are levels found on the 1 hour chart reliable enough?

I don't use the usual support and resistance lines, I only refer to supply and demand zones, but in each long daily candle there's a significant amount of twisting and turning going on so I'm wondering, with your experience (that's all of you, and consider that this is a forum for spreading knowledge and asking questions) do you find that the levels on a 4 hour and 1 hour chart is reliable enough for trading?
 
Intraday … I’d use the 1,5,30min
Use the 5 as my main, 1 for entry / exit and 30 for context.

Levels don’t matter
What’s important is PA around them.

If there is a level then PA is going to do its thing,

Better react to PA than anticipate levels

Equity wise (open 6.5 hours) the 65min is reliable enough to take swing trades.

On 24/7 market the 4hrs is reliable enough to take swing trades.

Therefore the 4hrs is a bit overkill IMO for day trading.

Daytrading for me is 1,5,30 max

The only levels I care about is the immediate last 3 or 4 swing highs and lows.

+ If the price is currently Rallying or Reactionary.

The market doesn’t care what you have on you chart.

Fortune has been lost because of “significant levels”

I bought the heck out of it because it reached the 52w low. Yeah … but price kept plummeting.

The market is going to do what, where and when ever it wants to.
 
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