How to use multiple time frames?

[Sprout]

Another beginner question. I've been backtesting moving average crossovers against lower time frames for daytrading: 5min vs 1 min, also 4hrs vs 5mins.

I'd been told you should always use the higher time frame as your main buy/sell signal and then go down to the lower timeframe, and if both confirm it, you know your signal is more reliable so make the trade. But with the way I have my MAs setup, it's always one timeframe doesn't confirm, and so I've just watched basically a week of great trades leave me behind.

I welcome any wisdom on these two questions:

1. Is it foolish to just ride one timeframe?
2. Is there a smarter way of comparing multiple timeframes that doesn't just talk you out of making every trade?

Immediate basis for this question: I just spent 4 hours watching FSLY and I coulda cleaned up if I had just trusted my 1min chart, but instead I sat on my hands, "learning."

Take a single bar on the slower timeframe ie 30m.

See that it is composed of 6 - 5m bars.

Take that 1st 5m bar’s open and draw a horizontal line for the next 6 bars (inclusive).

That’s the doji of the 30m bar and it’s measure of the 30m bar’s sentiment.

The doji occurs on the open of every bar when it’s open is equal to it’s close.

There are 25 possible permutations of a 1pt 4 tick bar of all the possible open, close, high, low and whether the high or low came first.

It’s the beginning of a vocabulary, which are the basis of words, which form sentences by which the market ‘speaks’

Most never take the time to observe the flow of market information in it’s basic grandularity.

The daily bar is composed of ___ 30m
The weekly bar is composed of ___ 1D
The monthly bar is composed of ___ 1W

 

[easymon1]

Take a single bar on the slower timeframe ie 30m.

See that it is composed of 6 - 5m bars.

Take that 1st 5m bar’s open and draw a horizontal line for the next 6 bars (inclusive).

That’s the doji of the 30m bar and it’s measure of the 30m bar’s sentiment.

The doji occurs on the open of every bar when it’s open is equal to it’s close.

There are 25 possible permutations of a 1pt 4 tick bar of all the possible open, close, high, low and whether the high or low came first.

It’s the beginning of a vocabulary, which are the basis of words, which form sentences by which the market ‘speaks’

Most never take the time to observe the flow of market information in it’s basic grandularity.

The daily bar is composed of ___ 30m
The weekly bar is composed of ___ 1D
The monthly bar is composed of ___ 1W

Out of curiosity, how long did it take from your learning of this info to money in your pocket from implementing this info? Chart image examples of working and non-working would be most excellent. Any online info on this? What's it called? Thanks

 

[Sprout]

Out of curiosity, how long did it take from your learning of this info to money in your pocket from implementing this info? Chart image examples of working and non-working would be most excellent. Any online info on this? What's it called? Thanks

Elements of a system do not compare with a methodology as a whole. Learning the difference between a consonant and vowel is the building block to understand words.

Language is powerful, few understand.

In the above vid, the market is like the babies, the new mothers - noob traders.


It would be more useful to you to attempt the ‘5x5’ grid and post your results. All this stuff is in the ET archives, not really elsewhere unless one goes into old Usenet groups.

As for the ability to profit from an insight, pretty immediately. To do it consistently, then ‘context’ and the methodology for generating context is essential.

 

[kaizer]

Yeah I'm just getting started on understanding how/where to draw trendlines, no argument there, I can tell already that will take the most practice, looking forward to it, and I've been watching lots of charting videos on it. Think I'll start a separate thread on trendlines welcoming any advice once I get a little more practice at it if nobody minds.

And I did start to check out that thread you mentioned but after 6 years, it's 600+ screens so I only scratched the surface.

no need to read 600+ screens at all, just get the idea where the quest for holy grail leads

trendlines - dont forget its just way to view and structure the price action and not predictive element, the same is true for any study. Concentrate not on graphical forms, but on the traders behavior behind. Here again MTF concept is in play because interday traders can be bullish and intraday swing bearish and so on.

 

[kaizer]

Dollardogs: Just my 2 cents here but keep in mind that trading and market analysis have an "art" component. Anyone who tries to make it purely a science will end up frustrated and concluding that nothing works.

well, very special art. Like in mathematics. Math is exact science, but solving math problems is art, more complicated problem - greater art needed.

 

[easymon1]

Language is powerful, few understand.

ah so.

 

[Dollardogs]

Dollardogs: Just my 2 cents here but keep in mind that trading and market analysis have an "art" component. Anyone who tries to make it purely a science will end up frustrated and concluding that nothing works.

Yeah I feel like that's the one relative advantage I have is that I'll know not to apply anything too mechanically. But I'm still in that apprentice mode where I want to learn all the mechanics before I try to loosen/transcend them.

 

[Dollardogs]

Take a single bar on the slower timeframe ie 30m.

See that it is composed of 6 - 5m bars.

Take that 1st 5m bar’s open and draw a horizontal line for the next 6 bars (inclusive).

That’s the doji of the 30m bar and it’s measure of the 30m bar’s sentiment.

The doji occurs on the open of every bar when it’s open is equal to it’s close.

There are 25 possible permutations of a 1pt 4 tick bar of all the possible open, close, high, low and whether the high or low came first.

It’s the beginning of a vocabulary, which are the basis of words, which form sentences by which the market ‘speaks’

Most never take the time to observe the flow of market information in it’s basic grandularity.

The daily bar is composed of ___ 30m
The weekly bar is composed of ___ 1D
The monthly bar is composed of ___ 1W

Saw a guy do a video on youtube where he executed this idea, pretty interesting thought-process, feel like I half-understood what I was supposed to take away from that though. I'll try it out, see what pops.

 

[easymon1]

Saw a guy do a video on youtube where he executed this idea, pretty interesting thought-process, feel like I half-understood what I was supposed to take away from that though. I'll try it out, see what pops.

could you post that link? thanks

 

[easymon1]

...here's a vid showing one of the Simple ways a trader can use multiple time frames as one of the tools in the toolbox. Often happens that "heads-ups"happen on a 30min chart a few minutes before a nice setup triggers on a 2m or 30s chart. Same simple strategy Holmes is using in this vid to sniff out the elusive "next good trade". lol
cued and ready to rock...