How do you trade using multiple time-frames?
- Thread starter helpme_please
- Start date
I can give you an example, but I'm not sayings it has any edge or anything. Let's say you trade on 1m. You know there are many traders, and more importantly many auto systems, get their trigger on 5m. Now you see a three red 5m candles in a row and a new green candle forming. All the popular indicators will soon be triggering
So you can make an assumption that once that candle closes there will be a surge of buy orders. You can try to front run that with small risk. The next thing you know the green is spilling over into a 15m candle and you are on a free ride to the next wave of orders if you can survive the next ten minutes.
That's a really good idea @qlai ! To create an algo around this concept, let's say you have a profitable algo on the 15 min time frame. You could remove any algo components referencing the most recent bar and drop the algo down to a lower time frame (5 min for example). So now you have a 5 min algo referencing the previous 15 min bars and now you look for a new trigger on the 5 min time frame.I can give you an example, but I'm not sayings it has any edge or anything. Let's say you trade on 1m. You know there are many traders, and more importantly many auto systems, get their trigger on 5m. Now you see a three red 5m candles in a row and a new green candle forming. All the popular indicators will soon be triggering
Well that's easy ... Books, articles, YouTube, platform defaults, ohlc data providers, etc.
Yeah that's not as easy. But the good thing is you should know within a few seconds. You either up 1R or get out.
Damn, now you made me start coding this in my head on Saturday!
How to use multiple timeframe charts?
take for example a particular futures and you have charts like
daily chart,
hourly chart,
15 minutes chart,
5 minutes chart,
1 minute chart.
and you are doing day trading.
daily chart gives you a big picture. It gives you the helicopter view.
hourly chart gives you a medium size picture.
Your signal, your entry shall be based on
15 minutes, 5 minutes AND 1 minute chart.
when to use 15 minutes, 5 minutes and 1 min chart?
This is where you must have tons of experience.
As long a you are unable to choose the appropriate chart, you
will find very hard to earn money.
Use 15 mins chart when market is moving very sluggishly.
Use 1 min chart when market is moving very rapidly.
Use 5 min charts when market is moving at average speed.
My charts are volume based.
I have 3 to 4 charts of different volume for each futures.
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take for example a particular futures and you have charts like
daily chart,
hourly chart,
15 minutes chart,
5 minutes chart,
1 minute chart.
and you are doing day trading.
daily chart gives you a big picture. It gives you the helicopter view.
hourly chart gives you a medium size picture.
Your signal, your entry shall be based on
15 minutes, 5 minutes AND 1 minute chart.
when to use 15 minutes, 5 minutes and 1 min chart?
This is where you must have tons of experience.
As long a you are unable to choose the appropriate chart, you
will find very hard to earn money.
Use 15 mins chart when market is moving very sluggishly.
Use 1 min chart when market is moving very rapidly.
Use 5 min charts when market is moving at average speed.
My charts are volume based.
I have 3 to 4 charts of different volume for each futures.
-----------------------
Actually, with some additional rules and trade statistics, such an idea can be morphed into a powerful proprietary breakout system. It would require some major diligence though.
Might help some , from Robert Krausz
LAWS OF MULTIPLE TIME FRAMES
1. Every time frame has its own structure.
2. The higher time frames overrule the lower time frames.
3. Prices in the lower time frame structure tend to respect the energy points of the higher time frame structure.
4. The energy points of support/resistance created by the higher time frame's vibration (prices) can be validated by the action of lower time periods.
5. The trend created by the next time period enables us to define the tradable trend.
6. What appears to be chaos in one time period can be order in another time period.
LAWS OF MULTIPLE TIME FRAMES
1. Every time frame has its own structure.
2. The higher time frames overrule the lower time frames.
3. Prices in the lower time frame structure tend to respect the energy points of the higher time frame structure.
4. The energy points of support/resistance created by the higher time frame's vibration (prices) can be validated by the action of lower time periods.
5. The trend created by the next time period enables us to define the tradable trend.
6. What appears to be chaos in one time period can be order in another time period.
TrendSpider_Jake
Sponsor
It depends on what type of trader you are. As a swing trader, I like to use the daily chart as a way to see the trend but then shorter term timeframes to actually scale into the trade.