Intraday: Higher Timeframe/Trend

T

tradersaavy

When trading intraday, meaning going flat at the end of the day and looking for set ups that have time and room to play out within the day, how do larger timeframes guide your trading decision ?

For some examples:

* 60m has just created a double top and is trending down but the 5m chart has a picture perfect bull flag

* 5m has a nice long reversal pattern forming but none of the higher timeframes you look at show any obvious support and are in downtrends

* 30m has just broken down from a consolidation and it is looking like a bearish shallow pullback, which is an uptrend day on the 5m. Do you buy pullbacks/breakouts on the 5m uptrend day ?
Here's a picture of this one:
 

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If the short-term time frame is in conflict with the long, I wait until that conflict ceases. So if the 60 min says down, and the 5 min says up, I'll wait until the 5 min stops saying buy, then go short. If the market goes down and the 5 min then starts giving sell signals, I'll add to my position.

Actually I often find the best entries to be those where you sell the end of a short-term move which has been running counter to a longer-term trend.
 
Quote from Cutten:


Actually I often find the best entries to be those where you sell the end of a short-term move which has been running counter to a longer-term trend.
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Thanks for the insight Cutten.
 
I use the same e signal set up you have.
I use 1min,3, 5, 15, 60 and daily.

I mainly trade retracements.
1) My method is to identify a flag that is a retracement in a trend on that timeframe.

2) Go to the next higher time frame to assess profit potential and significant support/resistance to make sure there is enough potential for profit as well as a tight stop can be put in. (also to make sure I am trading in the direction of this trend)

3) go to the next LOWER time frame and wait for it to exhaust itself. I use an oscillator and wait for a divergence.

20EMA and price oscilator on all charts.

Let me explain how a trade works for me in this method:

1)identify a 3 or 5min bullflag.
2) make sure 15min is in uptrend and has further to go.
3) Go to 1 minchart and wait for divergence or trend change back in higher time frame direction.

can do this all day with different time frames
15min pattern - 60min higher TF - look for 3 min exhaustion, you get the idea.

So to answer you question about 9.30/03, I would not have taken the 5 min bullflags because it was against the 30 min downtrend.
 
Quote from Cutten:

If the short-term time frame is in conflict with the long, I wait until that conflict ceases. So if the 60 min says down, and the 5 min says up, I'll wait until the 5 min stops saying buy, then go short. If the market goes down and the 5 min then starts giving sell signals, I'll add to my position...
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Cutten,

Good advice.

I would also like to add that if a trader for some reason feels the need to put on a trade position when such a conflict exists...

(I do this sometimes myself)

to reduce his/her risk via reducing the position size.

Simply, small size when conflict exist between signals on short and longer time frame...

normal to large size when there's no conflict between short and longer time frame.

NihabaAshi
 
good thread. i just watch 1min and 5min. kind of try to go with 5min trend. but anyway why would you want to miss a great uptrend day just because its a bear flag on the hourly? if you're a daytrader you should be longing on uptrend days no? if you're a daily trader then you should get short on the closing basis or tommorow (whenever that bear flag breaks), but it would be trading the daily, not daytrading. i think you're mixing too many times frames here.
 
Quote from inandlong:

I don't know that you could have a great uptrend day and a bear flag on the hourly chart simultaneously.
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Picky, picky, OK, maybe not a classic uptrend day like the attached chart, but, the chart that I posted in the original thread is 30m bear flagish and the 5m is uptrending all day after a morning reversal
http://www.elitetrader.com/vb/attachment.php?s=&postid=346619

The point is, like the original thread states, how people play the smaller timeframe when the larger timeframe is looming with perhaps something against the smaller timeframe.
Thanks.
 

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Has anyone considered that when there is a conflict between timeframes that that could actually be a contrarian reversal play?
In other words you may see that on a weekly chart the trend is down. However, on the daily chart the trend is now bullish. What to do? I go long and if the bullish reversal breaks down - I short. Sometimes the weekly chart will turn bullish only to break back down again.

ticks = minute bars = daily bars = weekly bars = monthly bars.

I think you get the point.:)
 
Here's an example from today, 10-13 where I passed on what would have been a great short on the 5m, because the 15m looked so bullish.

Here's the 15m chart:




5m chart is in the next reply
 

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