Daytrading timeframe question - for experienced and profitable traders only please

Quote from anglagard:

Not worried about the thrill, however, I do worry about gaps against me when swing trading.

How do you handle that ?

Thank you
More...

hedge w/ options (if long spend a certain % of position on otm puts, reverse if short)
 
Quote from ammo:

use the larger timeframes for s/r,see if we are approaching or leaving one,trade in that direction,use the smaller timeframes to time your entries,just a rule of thumb but it might keep you on the right side of the market for the smaller losses ,bigger profits
More...

Best response on the board here... short and sweet....and spot on.

Based on ammo's response- here are questions to ask yourself:

1) What is the current big picture trend (i.e. 60 minute chart)?

2) Where is price on the curve relative to where significant support/resistance resides? (if your answer to #1 is an uptrend, and there still is significant distance on the curve to next resistance- the probabilities are in your favor to continue in direction of the trend....if you are near the top of the curve however, your probabilities are reduced).

3) Drop to a smaller time frame (i.e. 15 min time frame) and identify key demand/supply zones-- where a key pivot areas where price reversed with conviction (i.e. large candles/gaps)...where is prior resistance that is now support? Based on your answer to #2 that shows the larger time frame trend is still in tact with no immediate resistance, look for price coming back down into these short term demand zones...and also with conviction (i.e. strong arrival with big candles...not the slow drift stair step small candles that can indicate a continued drift and potential break of the support). If the level above that price left to get to this point is decent to offer at least a 2:1 or 3:1 reward to risk ratio (based on a stop below your support)...you have a basis for a trade set up.

4) Tweaking your entry. Drop down to an even smaller candle (i.e. 5 minute). Look for a reversal candle... i.e. a hammer, bullish harami, or bullish engulfing... even better, throw a bollinger band ema and execute based on a pierce of the band which indicates an extreme).

Voila. You will be astounded how your success will change with this simple approach.

Remember-- although you are a trend player and getting in on a setup on a smaller time frame that technically is a countertrend trade might seem counterintuitive to you, any continuation of a larger timeframe trend (in this case an uptrend) is typically not without a significant reversal on the shorter time frame.

Good luck.
 
Quote from Riffraffpatrol:

Best response on the board here... short and sweet....and spot on.

Based on ammo's response- here are questions to ask yourself:

1) What is the current big picture trend (i.e. 60 minute chart)?

2) Where is price on the curve relative to where significant support/resistance resides? (if your answer to #1 is an uptrend, and there still is significant distance on the curve to next resistance- the probabilities are in your favor to continue in direction of the trend....if you are near the top of the curve however, your probabilities are reduced).

3) Drop to a smaller time frame (i.e. 15 min time frame) and identify key demand/supply zones-- where a key pivot areas where price reversed with conviction (i.e. large candles/gaps)...where is prior resistance that is now support? Based on your answer to #2 that shows the larger time frame trend is still in tact with no immediate resistance, look for price coming back down into these short term demand zones...and also with conviction (i.e. strong arrival with big candles...not the slow drift stair step small candles that can indicate a continued drift and potential break of the support). If the level above that price left to get to this point is decent to offer at least a 2:1 or 3:1 reward to risk ratio (based on a stop below your support)...you have a basis for a trade set up.

4) Tweaking your entry. Drop down to an even smaller candle (i.e. 5 minute). Look for a reversal candle... i.e. a hammer, bullish harami, or bullish engulfing... even better, throw a bollinger band ema and execute based on a pierce of the band which indicates an extreme).

Voila. You will be astounded how your success will change with this simple approach.

Remember-- although you are a trend player and getting in on a setup on a smaller time frame that technically is a countertrend trade might seem counterintuitive to you, any continuation of a larger timeframe trend (in this case an uptrend) is typically not without a significant reversal on the shorter time frame.

Good luck.
More...

One major item to add to the above- if you are trading individual stocks-- timing your entry with correlation to the market is HUUUUUUGE...your probabilities of success are much higher.
 
I only trade from one time frame, but that time frame changes based upon volume and volatility. In other words, I choose the time frame that matches my style of trading to the current market conditions.
 
Quote from murray t turtle:

===============
Ang;
My most profitable daytrades were with 30 & 60 minutes candles;
not that i always waited for 29.99 & 59.999 minutes.LOL

Having said that, since you mentioned ''trend-following '';
i found swing/position trading/trends so much more profitable, i stopped daytrading.

Hey Did you notice the ''Market Makers Edge''daytrading book , by Joshua Lukeman,had multimonth charts in it??[Hint Hint]
:D

True,medium timeframe trend trading is not as thrilling as day trading trends.....:cool:
More...
####################################

What do YOU mean by "swing/position trading/trends" - might be quite helpful since there are various versions out there???

Thank you.
 
You must log in or register to reply here.
Back
Top