It's the timeframe...gaddammit

[kandlekid]

True or False
Any strategy can be profitable given the right time frame?
When I review losing trades, its not so much the strategy was wrong but moreso my time frame. Thanks for feedback.

I don't think so (False). Case in point. Buy high, sell low. This strategy will not generate a profit in any time frame. If you can find a time frame where this does not apply, PM me. I'll be happy to invest with you.

 

[maxinger]

many people failed to have an agile mind.
sometimes, you have to use 1 hour chart, sometimes, 15 min chart, sometimes 1 min chart.
professional talkers and writers like to say 'never use 1 min chart' because they don't
spend enough time looking at charts.

It is better to use volume based chart.
take for example NQ.
sometimes you use 100V for entry, sometimes 400V, sometimes 1600V depending on market condition.

 

[AbbotAle]

professional talkers and writers like to say 'never use 1 min chart' because they don't
spend enough time looking at charts.

True. Anyone who says don't trade the 1m because there's too much noise/nonsense hasn't taken the time to properly research the 1m world. If they had, they'd find out it's the best time-period to short term trade the markets.

Plus, if you're good on the 1m you can be good on ANY other timeperiod.

 

[trdes]

This isn't even a debate. The markets are fractal. Just because you change the time frame, doesn't change how the markets are moving. You're just changing how YOU view that information.

You certainly could do better on a different time frame or type of chart, but that would be because of your own personal reasons ie: lack of speed, mental state or ability to effectively parse the data down and read it effectively.

I do find having multiple charts up can be helpful(as long as it doesn't over whelm you, otherwise it will be more hurtful than helpful). If you have identified a true edge, than it will work on any time frame, therefore having multiple charts can give you multiple signals. The only difference is a larger chart you would expect a bigger move, so have to adjust your stops / profit accordingly via ATR or another method.

Also, if a larger chart goes into a brand new sell, that will make smaller time frame buys more difficult, generally speaking.

 

[Turveyd]

This isn't even a debate. The markets are fractal. Just because you change the time frame, doesn't change how the markets are moving. You're just changing how YOU view that information.

You certainly could do better on a different time frame or type of chart, but that would be because of your own personal reasons ie: lack of speed, mental state or ability to effectively parse the data down and read it effectively.

I do find having multiple charts up can be helpful(as long as it doesn't over whelm you, otherwise it will be more hurtful than helpful). If you have identified a true edge, than it will work on any time frame, therefore having multiple charts can give you multiple signals. The only difference is a larger chart you would expect a bigger move, so have to adjust your stops / profit accordingly via ATR or another method.

Also, if a larger chart goes into a brand new sell, that will make smaller time frame buys more difficult, generally speaking.

Disagree.

On an M1 chart, you can wait for news and play a quick news trade, on a H1 chart you won't even see that move, so your forced to trade in different ways.

Problem with H1 chart is, you still have to be there mid bar to buy towards the low of that H1 bar, so M1 or H1 you've still got to monitor the markets pretty closely.

M1 only here, just ends up being M1 uptrend, M15 downtrend so can't trade then it goes up and blasts through M15 so trade missed for nothing.

 

[userque]

This isn't even a debate. The markets are fractal

I also disagree. It is a debate.

It's not a law. It's not even a theory. It's a hypothesis. And, price action can't be a fractal due to gaps in time (between market close and open), and days ('weekend'), imo. But the creator of the hypothesis explains far below. However, there is a small area of the markets that can be considered, potentially fractal, but being fractal doesn't mean that "time frame doesn't matter." I explain below.

Imo, the intraday times frames could be fractal, within one continuous time range--between the open and the close.

Assuming it is fractal, there is a huge difference between a strategy running in the 1 minute vs 5 min. time frame.

First let's assume a strategy is designed to be stopped out at the hi/lo of the previous bar. The range of the 1 min. bar will generally be 1/5 the range of the 5 min. bar. A strategy that works of the 1 min. time frame, may not work on the 5 min. for this reason alone.

Second, a strategy that uses bar structures to trade, can make trades with 1 min. bar waves, that aren't present with 10 min. bars. So, in this case, yes, time frame matters.

Imo, in sum, the markets are not fractal due to outside influences (traders going to lunch etc.). If you take a fractal process in nature, a coastline, for example, and exert outside influence on it (creating a straight section of the coastline), then it is no longer fractal at that location.

And even if the markets were fractals, trading systems don't necessarily work in a fractal 'sense.' A strategy that relies on bars, will behave differently in different time frames. Such a strategy is not based on the fractal nature, it is based on chunking price into time slots.

https://www.quora.com/Are-financial-markets-fractal

Edgar Peters, Asset Manager with over 40 years experience
Updated June 29, 2016

While this question is from a while ago I thought I should post an answer since my Fractal Market Hpothesis is mentioned below. Markets are not fractal in that price patterns are fractal. Markets are statistically fractal though not all the time. As mentioned fractals lack a characteristic scale. In the FMH the "scale" of the market is the investment horizons of the participants. Unlike classical capital market theory which assumes investors have the same investment horizon. The FMH assumes that investors all have different investment horizons. This is important because the interpretation of information depends upon investment horizon. For instance shorter horizons tend to be more technically oriented while fundamentals apply at the longer horizons. As long as this structure exists there is ample liquidity in the market place. This structure results in stable markets with low volatility. Most traditional capital market assumptions apply especially that risk is rewarded with return. Every few years something happens which makes the long term more uncertain. Long term investors become shorter term and the investment horizon of the market becomes more uniform. Investors interpret information in much the same way causing panics and stampedes. Traditional capital market theory assumption generally don't apply. Volatility is high and unstable. Also risk is not necessarily rewarded with return. The market loses its fractal structure And becomes unstable. More details are in my 1994 book, "Fractal Market Analysis" and also at First Quadrant and a paper titled "A Tale of Two States." Finally there has been much research recently supporting the FMH using wavelet analysis which finds that during a crisis higher frequencies do dominate and during stable markets no frequency dominates.

 

[maxinger]

professional talkers & writers like to talk about fractual things.

professional traders do things differently from professional talkers and writers.


professional talkers & writers are not professional traders.
professional traders will not be professional talkers & writers

 

[AbbotAle]

professional traders will not be professional talkers & writers

But many professional traders are excellent writers (on investing/trading).

One of the best is Mark Spitnagel. Another is Peter Lynch. Neiderhoffer also writes well but likes to jerk off to people with top class degrees. Soros's two books were excellent, although deep.

 

[trdes]

Fair enough, but I don't really care what anyone else says. Not because I want to be ignorant or want to be a jerk it's because I've verified what I am saying myself and seen the evidence.

So even if my theory is wrong and the markets aren't fractal, the end result is my signals work on every single time frame(seconds to monthlys), chart type(renko,range,kase,volume,tick,momentum), the only difference is the ATR adjustment.

So, overall I can concede in may be a debate, have fun debating it, but the overall concept is not a debate for me personally, since I have actual proof.

 

[Turveyd]

Fair enough, but I don't really care what anyone else says. Not because I want to be ignorant or want to be a jerk it's because I've verified what I am saying myself and seen the evidence.

So even if my theory is wrong and the markets aren't fractal, the end result is my signals work on every single time frame(seconds to monthlys), chart type(renko,range,kase,volume,tick,momentum), the only difference is the ATR adjustment.

So, overall I can concede in may be a debate, have fun debating it, but the overall concept is not a debate for me personally, since I have actual proof.

If your 100% chart, and don't factor in news times and trades all times the same then fair enough.