Is the larger time frame overrated?

xelite777 · Dec 20, 2013

Quote from RedTankEra:

Those that consider fast timeframes unreadable or crowded with noise, simply don't know how to read them or don't know what to look for.

The only problem with very short time frames is that they are easier to manipulate.

It is obviously easier to hunt stops on the 1 min chart than on the monthly charts, for instance.

RedTankEra · Dec 20, 2013

Quote from xelite777:

The only problem with very short time frames is that they are easier to manipulate.

It is obviously easier to hunt stops on the 1 min chart than on the monthly charts, for instance.

Absolutely, but let's look at the advantages, smaller stops, higher frequency, potentially bigger rewards.

xelite777 · Dec 20, 2013

Quote from RedTankEra:

Absolutely, but let's look at the advantages, smaller stops, higher frequency, potentially bigger rewards.

Right again.

But here is the secret to making real money with smaller time frames, and it took me a lot of trials and errors to figure this thing out.

When you buy/sell with short time frames and the market is now moving in your favor, switch to a higher time frame to follow the trend.

For example if you use the 15 min charts to find a trading opportunity and you are winning, switch to the 1h chart and follow the trend there, otherwise you will never maximize your profits, because most of the time the trend will "end" prematurely on the 15 min chart but continue non stop on the 1h chart.

In other words, use a higher time frame to exit your winning position.

galvinlee888 · Dec 21, 2013

Quote from MarketAddict:

Is the larger time frame overrated? Most gurus will say stick with the higher time frame because it's more reliable.. Me personally, I dont see anything wrong with the small or large time frame. I see the same patterns on all of them..

So what do you guys think?

Commission and slippage make the different. This make the different between the loser (day trader) and winner.

xelite777 · Dec 21, 2013

Quote from galvinlee888:

Commission and slippage make the different. This make the different between the loser (day trader) and winner.

Day traders are necessarily losers?? Where did you get that information, Mad Magazine?

uexkuell · Dec 21, 2013

It might be helpful to consider the question from this perspective:

- If it is easy to spot a strategy in a bigger timeframe that means that big money leaves much money on the table (people might enter with high leverage).
- If a strategy can be found in a smaller timeframe big money only left small money on the table.

How high is the probability that big money is habitually leaving big money on the table?

xelite777 · Dec 21, 2013

Quote from uexkuell:

It might be helpful to consider the question from this perspective:

- If it is easy to spot a strategy in a bigger timeframe that means that big money leaves much money on the table (people might enter with high leverage).
- If a strategy can be found in a smaller timeframe big money only left small money on the table.

How high is the probability that big money is habitually leaving big money on the table?

What do you mean by "spot a strategy"?

Trader.Fighter · Dec 21, 2013

Only thing overrated is single timeframe trading.

Swan Noir · Dec 21, 2013

When my entry bar shows a low MAE and I really like where the move originated this transition has worked well for me. Just because you enter based primarily on a smaller time frame or tick chart there is no reason to manage the trade "small".

Quote from xelite777:

Right again.

But here is the secret to making real money with smaller time frames, and it took me a lot of trials and errors to figure this thing out.

When you buy/sell with short time frames and the market is now moving in your favor, switch to a higher time frame to follow the trend.

For example if you use the 15 min charts to find a trading opportunity and you are winning, switch to the 1h chart and follow the trend there, otherwise you will never maximize your profits, because most of the time the trend will "end" prematurely on the 15 min chart but continue non stop on the 1h chart.

In other words, use a higher time frame to exit your winning position.

running_bare · Dec 22, 2013

Time for real talk

How many ticks did you make in the past 12 mths?

Quote from xelite777:

Would you rather make 5 trades and earn 50 pips on each trade in a 2 day period and repeat the whole process again or earn a "BIG" 250 pips in 2 weeks (and it took you another 2 weeks just to get the signal, total = 4 weeks)?

A taxi driver once told me that he makes much much more money with small but frequent 5 to 10 dollars trips than with trips to the airport that earn him $50 per trip.

Waiting for "big" moves does not necessarily mean you will make more money in the long run, far from it.