It's the timeframe...gaddammit

[wiesman02]

And you are looking for convergence to ...confirm your trade, no?

No, I dont require convergence to trade. Often,when you see such convergence, you'll get an extended trend in the indexes. When there's no convergence, you often will see what looks like say an uptrend, fail. Different time frames diverging, showing completely different things. So you see chop,or slop, or range, or whatever you want to describe it. Each provide its own set of opportunities.

 

[Tradex]

Different time frames diverging, showing completely different things

Yep, that's why I don't like to mess with different time frames at the same time (no matter what little value they may add to our trading decisions), it is already complicated enough with just one (1) time frame.

Alexander Elder was the one who popularized this top-down approach, but again it did not add any benefit to my trading, that's why I stick with one time frame and that's it.

 

[marketpugilists]

When I trade on the 15-min chart, I never look at the 1h or 4h chart just to see if they "confirm" my position, I look at the 15-min chart and that's it.

Because quite frankly I couldn't find any significant benefit with this top-down approach (looking at higher time frames first). In fact this approach only adds confusion to the trading process, in most cases. And you can miss a lot of good trades if you always wait for the OK from these higher time frames.

I'm a little surprised at the results so far...and maybe "timeframe" might be confusing a bit but instead "lifespan of trade" may be a better term. Like if only I had allocated a life span of 3 months instead of 1 month that trade could worked. Or a trade starting out as a loss turning to a profit and if it was profit to become with, take it off the table

 

[Tradex]

Like if only I had allocated a life span of 3 months instead of 1 month that trade could worked

Yes, but the losing trades would eat whatever profit you made after 3 months, leaving you at best with a break-even situation.

You cannot transform a losing system into a winning system just by giving your trades "more time" to unfold.

 

[marketpugilists]

Never. I always look at the higher time frame before putting on a trade. If the higher time frame is looking funky, at most Ill look for a quick scalp. If its converging, I'll let it run. But never will I disregard the higher timeframe. This is how you are able to filter out bad trades and keep a few losers out of your trading day. These are often the difference between a winning and losing day

What about life span (instead of time frame) of trade assuming your bet is small with no stop loss (meaning you can let it go against for a wide max pain point)? If you trade both long and short positions, then at some point in time an opportunity will present itself to profit. it may be one day or 10 years

 

[smallfil]

Good point, but say theoretically (1) no stop loss is used (2) trade size is small and (3) a set R:R is not adhered too, meaning one is not looking for say a strict 1:3 or anything like that but profit is profit. What do you say?

It looks like you want to trade without rules, without parameters? Your chances of success is slim to none. Close to zero percent. Your gains have to be multiples larger of your losses. If not, you will "never" make it as you will never cover all your losses to turn a profit.

 

[marketpugilists]

Well not exactly pertaining to rules/parameters although I do not subscribe to set&forget stop loss philosophy. Mine is moreso based on a hedge/counter trade. Original question was theoretical but interesting feedback so far.

 

[athlonmank8]

When I trade on the 15-min chart, I never look at the 1h or 4h chart just to see if they "confirm" my position, I look at the 15-min chart and that's it.

Because quite frankly I couldn't find any significant benefit with this top-down approach (looking at higher time frames first). In fact this approach only adds confusion to the trading process, in most cases. And you can miss a lot of good trades if you always wait for the OK from these higher time frames.

I agree. You need to establish some sort of metric for direction though. If its making new highs expect continuation. Using a 15 min strategy to fade into strength isnt going to work so the top level needs to be used for direction imo.

 

[Tradex]

You need to establish some sort of metric for direction though

I day trade the Forex (and a few highly liquid Futures products) on the 15-min. I truly believed that the higher time frames (the 1h for instance) could help me "stay with the trend" and improve my trading results.

They did not, at all. Yes, they eliminated a few losing trades here and there, but I also missed a lot of big trends that way.

There are a lot of trading ideas that sound cool and logic, like using a higher time frame for confirmation or trend direction, but when you really put them to the test they fail miserably.

That's why I never take any "brilliant" trading idea for granted anymore.

In fact, my most profitable systems are totally counterintuitive, like using reversal strategies to ...stay with the trend! (Yes I know, sounds crazy )

 

[traderking007]

if you are blaming time frame then use a volume chart or tick chart or range chart???