How do you know what's real? (candlesticks)

[pk3r1234]

I've traded off of one minute charts for a long time but sometimes I'll miss plays that actually set up fine on a 5 minute chart. Even worse than that, I have 2 different data feeds/brokers and sometimes the charts look completely different. Does that mean a 5 or 10 minute chart would have better plays or be more accurate?

 

[Fractals 'R Us]

Bars, especially time bars, are very arbitrary things imposed over what the market is actually doing.

 

[wartrace]

I have no clue how anyone expects a price bar to tell them anything other than the range price was over an arbitrary time period. I use a 2 tick renko footprint chart and a 150 tick chart for the "big picture". I also watch the Depth of Market and the tape. I just wait until buyers or sellers dry up and go with the flow. It might not be the "best" way to trade but it seems to work for me.

BTW- Do some research and determine which provider is producing reliable data. There are some brokers that do not offer tick data but instead "aggregate" data. I have heard IB is one that you should avoid if you need tick by tick data.

 

[wrbtrader]

I've traded off of one minute charts for a long time but sometimes I'll miss plays that actually set up fine on a 5 minute chart. Even worse than that, I have 2 different data feeds/brokers and sometimes the charts look completely different. Does that mean a 5 or 10 minute chart would have better plays or be more accurate?

Easy solution...

Watch both time frames and if you don't have enough monitor space to do that...get another monitor.

Yes, its normal to see slight differences in your charts and the DOM between different data vendors especially if one of them is filtering the data...more of a problem on small time frames.

 

[Turveyd]

WarTrace is 100% right, it's an Arbitary Time Period, ie the Start and End time have no significance regardless of TF, therefore this is a myth many believe in, but can't be used as and edge at all.

Scan through the charts, looking for Bars which match what your looking for and work out yourself that there is nothing in it.

 

[Iron.Maiden]

I find them very helpful and remember some timeframes have the same open close high and low no matter the trader.

 

[KDASFTG]

Greetings All,

I’m not so sure that the 1 Minute and 5 Minute charts are really so arbitrary and without significance to folks using other chart techniques. To understand my reasoning please consider the following:

In order for any short term signal < 5Minutes to succeed, you must have “other short term participants” join into your move to help push prices one way or the other. And, it is a well documented fact that the vast majority of short term market participants are historically using and monitoring the 1Minute and 5Minute Charts. Therefore, these two charts are the domain of the very “mass participants” that you need to join into your short term signal to move prices along one way or the other.

If you are using and monitoring a chart technique outside of these two intervals, in my mind you would be well advised to check and see if your particular signal is in close proximity, or at least coincident with the standard and classical signals generated on these two time intervals. Bereft of this useful knowledge and information, you may well be executing your signal at times when the vast majority of short term market participants are about to enter, or have already entered. In any case, I believe that as standard practice, and at a bare precautionary minimum, if using different charts, one should always periodically compare the efficacy of their short term signal against these two time intervals, to determine if there are any potential anomalies in their signals as a result of the pervasive influence of these two trading intervals.

With regard to multiple data feeds and the deltas in various chart formations, in my opinion I liken it to this situation; if you ask a person with a watch what time it is, they will give you their “exact” time. However, if you ask a person looking at two different timepieces what time it is, they will very likely not know “exactly” what time it is. The consequence of this type of signal “confusion” for traders is pretty obvious, therefore, I my opinion I believe it wise to either use one feed or the other for your trading signals, but not both simultaneously. In any case, I believe that as retail traders so long as our data feeds are fairly timely and reasonable, the extremes of most charts one minute and above should be fairly consistent and congruent.

However, I also believe that if you are attempting to consistently operate with a single chart of less than one minute, and this is something that I would not advise these days, you will definitely need a very high integrity and high quality data feed. And even then, I feel you would still be operating at a significant disadvantage to the HFT folks who consistently function in this domain. Further, in my experience I know for a fact that it is not necessary or even wise for most people to attempt to compete with them to succeed. But, I also would be the first to say to the retail folks who are consistently doing it profitably and successfully,…more power to you,…you have my respect.

These are just my opinions, but I’m still very much open to hearing and discussing constructive and civil arguments to the contrary, that's the reason why I joined ET.

KDASFTG

 

[pk3r1234]

Greetings All,

I’m not so sure that the 1 Minute and 5 Minute charts are really so arbitrary and without significance to folks using other chart techniques. To understand my reasoning please consider the following:

In order for any short term signal < 5Minutes to succeed, you must have “other short term participants” join into your move to help push prices one way or the other. And, it is a well documented fact that the vast majority of short term market participants are historically using and monitoring the 1Minute and 5Minute Charts. Therefore, these two charts are the domain of the very “mass participants” that you need to join into your short term signal to move prices along one way or the other.

If you are using and monitoring a chart technique outside of these two intervals, in my mind you would be well advised to check and see if your particular signal is in close proximity, or at least coincident with the standard and classical signals generated on these two time intervals. Bereft of this useful knowledge and information, you may well be executing your signal at times when the vast majority of short term market participants are about to enter, or have already entered. In any case, I believe that as standard practice, and at a bare precautionary minimum, if using different charts, one should always periodically compare the efficacy of their short term signal against these two time intervals, to determine if there are any potential anomalies in their signals as a result of the pervasive influence of these two trading intervals.

With regard to multiple data feeds and the deltas in various chart formations, in my opinion I liken it to this situation; if you ask a person with a watch what time it is, they will give you their “exact” time. However, if you ask a person looking at two different timepieces what time it is, they will very likely not know “exactly” what time it is. The consequence of this type of signal “confusion” for traders is pretty obvious, therefore, I my opinion I believe it wise to either use one feed or the other for your trading signals, but not both simultaneously. In any case, I believe that as retail traders so long as our data feeds are fairly timely and reasonable, the extremes of most charts one minute and above should be fairly consistent and congruent.

However, I also believe that if you are attempting to consistently operate with a single chart of less than one minute, and this is something that I would not advise these days, you will definitely need a very high integrity and high quality data feed. And even then, I feel you would still be operating at a significant disadvantage to the HFT folks who consistently function in this domain. Further, in my experience I know for a fact that it is not necessary or even wise for most people to attempt to compete with them to succeed. But, I also would be the first to say to the retail folks who are consistently doing it profitably and successfully,…more power to you,…you have my respect.

These are just my opinions, but I’m still very much open to hearing and discussing constructive and civil arguments to the contrary, that's the reason why I joined ET.

KDASFTG

Great post. I was thinking it had something to do with how many people were using them. That's why I'm hesitant to use random time frames and tick charts. Sure a tick chart may accurately show what's happening in the market, but if most people don't use tick charts I don't really see the point.

 

[schizo]

In order for any short term signal < 5Minutes to succeed, you must have “other short term participants” join into your move to help push prices one way or the other. And, it is a well documented fact that the vast majority of short term market participants are historically using and monitoring the 1Minute and 5Minute Charts. Therefore, these two charts are the domain of the very “mass participants” that you need to join into your short term signal to move prices along one way or the other.

While I am on the 5-minute chart, I ain't so sure your rationale about “other short term participants” has any merit. Of course, there must be abundant demand in order to push up the price. But it need not be done on any one time frame. Consider this watered-down analogy. Suppose a large number of traders or algos using the 233-tick chart begin buying after a long signal was triggered. That in turn triggers a buy signal on the 1-minute chart, which drives the 1-minute traders to jump on board. The strong momentum soon invites the 5-minute traders to join the runaway train. Before long, you have the 15-, 30-, and 60-minute traders all competing for a piece of the pie and, consequently, the damn price is off the chart.

As you can see, you do not necessarily need the impetus from any one timeframe to push up the price. This is especially true after a pullback following a very strong move. The pullback will signal a sell for those trading a shorter timeframe but those trading the higher timeframe will see it as an opportunity to reenter long or add to the existing buy order.

 

[ETcallhome]

hmmm, it's the old 50 day moving average, when it breaks below that they talk about it on tv. What's special about 50 days? I don't know, why not 49 or 63? The point is, it's something many watch.

Greetings All,

I’m not so sure that the 1 Minute and 5 Minute charts are really so arbitrary and without significance to folks using other chart techniques. To understand my reasoning please consider the following:

In order for any short term signal < 5Minutes to succeed, you must have “other short term participants” join into your move to help push prices one way or the other. And, it is a well documented fact that the vast majority of short term market participants are historically using and monitoring the 1Minute and 5Minute Charts. Therefore, these two charts are the domain of the very “mass participants” that you need to join into your short term signal to move prices along one way or the other.

If you are using and monitoring a chart technique outside of these two intervals, in my mind you would be well advised to check and see if your particular signal is in close proximity, or at least coincident with the standard and classical signals generated on these two time intervals. Bereft of this useful knowledge and information, you may well be executing your signal at times when the vast majority of short term market participants are about to enter, or have already entered. In any case, I believe that as standard practice, and at a bare precautionary minimum, if using different charts, one should always periodically compare the efficacy of their short term signal against these two time intervals, to determine if there are any potential anomalies in their signals as a result of the pervasive influence of these two trading intervals.

With regard to multiple data feeds and the deltas in various chart formations, in my opinion I liken it to this situation; if you ask a person with a watch what time it is, they will give you their “exact” time. However, if you ask a person looking at two different timepieces what time it is, they will very likely not know “exactly” what time it is. The consequence of this type of signal “confusion” for traders is pretty obvious, therefore, I my opinion I believe it wise to either use one feed or the other for your trading signals, but not both simultaneously. In any case, I believe that as retail traders so long as our data feeds are fairly timely and reasonable, the extremes of most charts one minute and above should be fairly consistent and congruent.

However, I also believe that if you are attempting to consistently operate with a single chart of less than one minute, and this is something that I would not advise these days, you will definitely need a very high integrity and high quality data feed. And even then, I feel you would still be operating at a significant disadvantage to the HFT folks who consistently function in this domain. Further, in my experience I know for a fact that it is not necessary or even wise for most people to attempt to compete with them to succeed. But, I also would be the first to say to the retail folks who are consistently doing it profitably and successfully,…more power to you,…you have my respect.

These are just my opinions, but I’m still very much open to hearing and discussing constructive and civil arguments to the contrary, that's the reason why I joined ET.

KDASFTG

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