So do you just mainly use the 15 minute charts for your entry signals? How do you think the same trader would do using a bigger-picture chart vs the 1-min & 5-min charts like most seem to use? It's definitely easy to get chopped up using the smaller timeframe charts..................I know that for a fact.
Simplicity in TA
- Thread starter Xspurt
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So do you just mainly use the 15 minute charts for your entry signals? How do you think the same trader would do using a bigger-picture chart vs the 1-min & 5-min charts like most seem to use? It's definitely easy to get chopped up using the smaller timeframe charts..................I know that for a fact.
Mac,
I traded using entry signals off the fast charts for years, but it felt like blue collar work, had to be glued to the screen for hours and hours.
I think a trader has to earn the smaller timeframes as he/she gains expertise vs starting at them, eventually you need to decide if it's worth the hassle or if swing trading is more apt for you.
The big picture of a multi-day chart encompassing 3-5 days is vastly more powerful than watching noise jump up and down in a fast noisy chart that could be changing it's trend every 15min.
How the big picture is represented, 5min crunched into small bars, 15min, 60 min, or daily expanded it's totally up to you but no matter what the TF is, it *must* be multi-day.
People in this site and magazines and other trading related places love to show examples of so called great "1min signals" but anyone in this business that has been doing it long enough knows the amount of chop this very same signals can produce. However, as the expertise is achieved, you begin to learn to how filter the areas where you ignore them vs the areas where you pay attention, for that you must understand what the bigger picture is doing.
Definitely work your way down as you gain experience, not the other way around.
For the record, I'm not an Al Brooks' fan whatsoever.
Here is a problem I have with multiple timeframe analysis... I lose sight of my main timeframe and as a result end up trying to manage an entry via a different timeframe than the one that gave me the trade signal. If I try to manage a 5-min entry on a higher timeframe, I could miss the 5-min exit signal and take a larger loss than I should have. If I try to manage a 5-min entry on a smaller timeframe, I can end up taking the smaller timeframe exit signal and then am out of the 5-min move which is still running. Similar to taking a short off an intraday SPX structure that goes back 3 days and then getting tripped up by a trendline on the 24hr ES chart that goes back 3 hours. I have trouble knowing where to focus my attention and also how much priority to assign any particular structure. If I'm drilling down from daily to intraday for an entry then it seems a logical progression to drill down even further on the intraday to manage it, but maybe not such a great idea...
Then there's the multiple markets.... 3 timeframes of SPX is no problem. Add in the Dow and it's up to 6 and I'm still ok, the Nasdaq and it's up to 9 and things are getting confusing. Then I realize I ought to look at the globex data for the intraday charts of each and that brings it up to 12, etc.
I was doing ok when I used more of a key-hole approach, but am having problems expanding that view. But those are examples of what I mean when I say I fell down the rabbit hole. Does any of this sound familiar?
Then there's the multiple markets.... 3 timeframes of SPX is no problem. Add in the Dow and it's up to 6 and I'm still ok, the Nasdaq and it's up to 9 and things are getting confusing. Then I realize I ought to look at the globex data for the intraday charts of each and that brings it up to 12, etc.
I was doing ok when I used more of a key-hole approach, but am having problems expanding that view. But those are examples of what I mean when I say I fell down the rabbit hole. Does any of this sound familiar?
Quote from dv4632:
Here is a problem I have with multiple timeframe analysis... I lose sight of my main timeframe and as a result end up trying to manage an entry via a different timeframe than the one that gave me the trade signal. If I try to manage a 5-min entry on a higher timeframe, I could miss the 5-min exit signal and take a larger loss than I should have. If I try to manage a 5-min entry on a smaller timeframe, I can end up taking the smaller timeframe exit signal and then am out of the 5-min move which is still running. Similar to taking a short off an intraday SPX structure that goes back 3 days and then getting tripped up by a trendline on the 24hr ES chart that goes back 3 hours. I have trouble knowing where to focus my attention and also how much priority to assign any particular structure. If I'm drilling down from daily to intraday for an entry then it seems a logical progression to drill down even further on the intraday to manage it, but maybe not such a great idea...
Then there's the multiple markets.... 3 timeframes of SPX is no problem. Add in the Dow and it's up to 6 and I'm still ok, the Nasdaq and it's up to 9 and things are getting confusing. Then I realize I ought to look at the globex data for the intraday charts of each and that brings it up to 12, etc.
I was doing ok when I used more of a key-hole approach, but am having problems expanding that view. But those are examples of what I mean when I say I fell down the rabbit hole. Does any of this sound familiar?
If it was easy most would be making money and mentors would be out of a job
It aint' easy it's freaking hard but it's not impossible, which is why I keep punching, that and knowing for a fact that it can be done.
Things ive learned from No Doji and Red Tank are showing me the light and its starting to reflect on my P/L, thank god, cause it was about freaking time man.
It looks like I've answered some of my own questions... if I'm going to expand into other markets then it needs to be done gradually, not all at once. If 12 charts is too much then don't watch 12 charts. Simple as that.
I also need to really know my trading timeframe. Whether it be trading hourly chart swings or trading off a 5-min chart, as yoohoo said, it all works. The problem is when I try to do both at once. This past week I would try and trade 30-min chart swings and then manage them like a 5-min trader or I'd trade a multi-day structure and then manage it much shorter term, in each case getting confused by all the happenings in the smaller timeframe. So no wonder I got lost down the rabbit hole...
I also need to really know my trading timeframe. Whether it be trading hourly chart swings or trading off a 5-min chart, as yoohoo said, it all works. The problem is when I try to do both at once. This past week I would try and trade 30-min chart swings and then manage them like a 5-min trader or I'd trade a multi-day structure and then manage it much shorter term, in each case getting confused by all the happenings in the smaller timeframe. So no wonder I got lost down the rabbit hole...
Thanks for the answer...............makes sense.
It seems like a good idea would be to buy the biggest monitor on the market & fill it up with a 5 minute chart. You could fit multiple days on it yet still have the bars big enough to see the details. When you see an area that looks good for a swing trade you could start looking for a reason to enter on a more micro-level Al Brooks style I guess you could say.
Another question: Do you include the after-hours activity on your charts? I currently trade CL & do not include it. I've gone back & forth on it though. It comes in handy for the first trade of the morning but for looking at the big picture I'm not so sure. Makes the chart look pretty messy at times. But then without it you have the gaps.
I most certainly don't as I want to see how the open is situated in relation to previous data without interference, many times the afterhours waves obfuscate what really matters, so don't let it confuse you, get rid of it and watch where that open lies in relation to your lines.
However, good backtest signals can be found in the afterhours using a 60min 24 hour chart, particularly around economic data from Asia, Europe or the US. Remember that many times an economic release will pin price to a key area or create technical damage, it is your job to determine what occurred during the announcement and not predict before it.
Best wishes in your trading endeavors.
I think it may be better to stick with trading a primary trading market and not get bogged down with too much other stuff. I had noticed some things in hindsight and it led me to believe I could gain more clarity and reduce whipsaws if I started to follow more markets intraday. As good as it looked after the fact, in real time it was another story.
Here's a chart of April 10,11,12,13 and some examples. There are many more like this.
On Wednesday morning someone could be long off the SPY backtest of broken channel limit, or short off the DIA upper channel limit rejection. This referring to the blue channel.
On Friday mid-day someone could be long off the DIA lower channel limit support, or short off the SPY backtest of broken lower channel limit.
In these examples adding another market just let's you know it could go either way, short the SPY line or long the DIA line. Looks like a game of pick your poison.
Is this an example of having two conflicting scenarios and waiting for one to fail?
In any case I think I better pull things back into more of a key hole approach for now.
Here's a chart of April 10,11,12,13 and some examples. There are many more like this.
On Wednesday morning someone could be long off the SPY backtest of broken channel limit, or short off the DIA upper channel limit rejection. This referring to the blue channel.
On Friday mid-day someone could be long off the DIA lower channel limit support, or short off the SPY backtest of broken lower channel limit.
In these examples adding another market just let's you know it could go either way, short the SPY line or long the DIA line. Looks like a game of pick your poison.
Is this an example of having two conflicting scenarios and waiting for one to fail?
In any case I think I better pull things back into more of a key hole approach for now.