For intraday timeframes, I would say any kind of charting fails to deliver an accurate picture, at least when talking in terms of TA. Time charts might be inconsistent, but tick charts would not give any indication of the pace of a move, which takes on a greater signficance on the shorter time frames imo.
TA and Intraday Charts.
- Thread starter Bogwaluth
- Start date
Are you using a longer timeframe to look for setups on the smaller timeframe? If you're trading on a 5-min chart, you might use the 60-min to analyze the longer-term condition. I use the daily as the longer timeframe and trade on the 60-min. For instance here is the GBP futures daily chart, w/total contract volume:
http://tinyurl.com/j45qn
Note following the strong rally to A there is an exactly 50% retracement to B of that rally. At B on 6/29 and 6/30 there are 2 strong days on wide spreads closing at the highs on strong relative vol. Price then goes sideways for a couple of wks and then there is a shallow test of B at C, followed by a nice 4 day rally on good up vol and closes on the highs. The 2 day reaction 7/24 & 7/25 on lower vol, shallow retracement. Then a break to a new high on increasing vol. At his point I'm looking for the rally to continue.
Dropping down to the 60-min chart, zoomed out:
http://tinyurl.com/ee5gs
There is significant s/r at the thick yellow line on the GBP/USD, say 8540, which has been broken at 1 following a long consolidation and shakeout and test of that shakeout, retraced again to exactly 50% and the mid-point of the range at 2 on a shallow test.
Now let's zoom-in on the 60-min:
http://tinyurl.com/kvbon
Following the consolidation at 2 there is a strong rally back to s/r at 3 on relatively wide spreads and closes on the highs, then virtually no pullback, but rather a tight sideways consolidation on very narrow spreads sitting smack on that s/r line. This followed by a good rally to a new high at 4. The reaction to 5 finds support at 3, the previous s/r line, and is another 'zact 50% retracement of a rally, here off 2. This support holds well on a mini-head-and-shoulders consolidation, then a nice wide-spread up-bar to 6, back to the previous high at 4. Here price again goes sideways w/almost nil retracement.
So I would be looking to add-to or take a long position during this consolidation following 6.
Harold
my gaussian distribution method cuts through the noise by looking for forceful upticks.
I have to disagree with this in a big way. Charts/indicators reflect price/time/volume. In short, trader/investor sentiment. The push and pull of buyers and sellers.
The interpretation of those measures - and how one trades on them - is going to be considerably different when moving from a timeframe of minutes to one of days or weeks.
Develop a profitable system in one timeframe and attempt to move it to another, and you'll appreciate the point.
I would imagine you would disagree, 95% of the traders out there will. The reason is you don't understand the trading environment I am referring to.
You mention "moving from a timeframe of minutes to one of days or weeks" and I mention NO "time" period whatsoever. The Markets can not be traded consistently using time. It has to be traded in Price, based in the specific movement of the individual market. Volume Bar Charts, which I refer to, are not based in minutes or ticks, they are based on a specific number of shares or contracts traded per bar. These can not be compared to minute or daily charts for accuracy so your disagreement of my statement is valid when referring to time based charts. Of course your comparison of "your" time based charts to my "price specific instrument" Volume Bar Charts is incorrect because in that environment there is no difference whether on trades intraday, swing or position as to their consist profitability but one must use a consistent indicator. Interpretation is another misnomer. When using Volume Bar Charts and a consistent indicator, interpretation doesn't enter into the trading equation. A specific & consistent indicator based on specific parameters applied to a non varying trading environment will give you consistent results that need not be interpreted but simply "read".
If you want to learn to daytrade, I'd suggest you avoid stocks and concentrade on Indicies or Fx. The charts are more fluid and don't gap. If you want to make it, be creative. As suggested, you might find the answer lies in looking at chart styles such as Volume, but try Tick and Range as well. One tip I will give you is - Range charts smooth your indicators and make them much more reliable. Also if you can cut it as a daytrader, stocks are not good for scalping big sized trades - you will find it hard to get your money in and out quickly. Daytrading gives ultimate control and profitability. A good place to look to get started is www.dacharts.com and click on daily charts and then click on any date. You'll find lots of traders and styles there. If you want to follow any on this up, go to www.ensignsoftware.com and click on Download and then EChat. When you download EChat go to the Bline room. It's Buffy's room and she will be glad to help. All of this is free. You can tell Buffy that rabbit sent you.