Perhaps you ought to look at a larger bar interval, such as the 60m.
Trading the SLA/AMT Intraday
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Perhaps you ought to look at a larger bar interval, such as the 60m.
Actually as I'm still testing all this I use 5/15 and the 60m. As I'm doing all this also for the european morning the overnight/asian session range - which can be quite tiny - has its "value".
For today all of them where helpful as price was ranging in between yesterdays high and low and you got a midpoint where price bounced twice during the EU morning/lunch time.
Is the reason behind your post that one could easily been dragged away buy plotting lots of tiny ranges? I believe you mentioned that recently.
Well I do.
Due to other jobs I can not do it every day.
But if I'm there I watch it real time.
I should add that I should less sim trade it and do more backtesting/replaying...but you know that kind...quantity in terms of screen time is not the problem...
That is absolutely true.
But you mean that more in terms of observation and not execution?
In terms of the latter I would still prefer the 1m.
With the reference of the ranges it all seems to get more and more obvious in terms of trading the extremes - or even to see in quick and sustain way if there is something to do or not.
Both. Execute whatever it is you're observing. I try to discourage people from daytrading whenever possible, but I'm nobody's mother. At the very least I suggest that those who are serious about this reserve at least some of their capital for hourly and daily intervals.
DbPhoenix has said that no matter the bar interval, all charts are tick charts. I do not think this is intuitive for most people, and it is worthwhile for one to ponder this until it becomes intuitive.
Lately DbPhoenix has been advising us to keep our eye on the right tick marker on the ohlc bar. This is largely what I have been doing for most of the past year using primarily a 5 minute bar interval. There are times, especially during the open, where I prefer a tick chart or a very small bar interval such as 30 seconds or 1 minute (and even then, only if price is either at or near an extreme of a range or price has formed a hinge heading into the open). But after the opening flurry, I usually settle in to my seat with a 5 minute bar interval chart and I just watch that tick whenever price is moving toward one or the other extreme of its most current range.
I do not know for sure, but I suspect most apprentices would do better using a 15 to 60 minute bar interval to identify the most immediately relevant trading range, and then trade that range using a five minute bar interval coupled with a keen awareness of the movement of the tick marker as price trades into those levels corresponding to the extremes of the range. DbPhoneix also had a post this week about combining candle sticks and combining individual bars to get a bigger picture view - you should hunt down that post and give some thought to what is implied in that practice and what the benefits might be to the trader.
I do not know how many of us at the apprentice level would be able to use our imaginations to so combine these bars and not get screwed up - we just wouldn't have the observational experience to do it accurately. But from some of the journals I've read, many of us apprentices are so engaged with the individual one minute bars "the trees" we miss or forget to see the range and where price is within it ("the forest").
This is yet another reason why the observation period is so important - not every straight line break results in a change in direction. In my experience, most do not. Most merely indicate a pause, a rest, a "change in stride" as DbPhoneix says. The observation period will help you learn which straight lines breaks are likely to indicate a trend change and which are likely signaling merely a pause or counter trend retrace before resuming price's quest for the next extreme (hint: step one is find the range).
And this is where watching the tick on a 5 minute bar interval can excel. That "violent reversal (2 points during an 80 point run is a 'violent reversal?') as buyers blah blah blah" that journalists are fond of noting on their one minute charts won't register as anything noteworthy, much less as 'violent' when viewed within the larger context of the trading range, and this context is easier, or at least more likely to be kept in the observer's focus on a 5 minute bar interval chart.
Finally, imo, many seem to want to cling to the one minute bar interval hoping it will somehow minimize risk - this is my opinion and it is the impression I get from reading many of these journal entries. The risk can only be minimized by identifying the range and watching what traders do when price reaches an extreme. I do not trade "bar intervals" I trade price ranges. How I trade them depend upon what that little tick on the right of the bar is indicating other traders are going to do. If you are not trading the range, if you are using a bar interval that causes you to lose focus on the range, change the interval. Find the interval, based on your observations, that allows you both to track what traders are doing and maintain your awareness of the context in which they are doing it.
With ETFs etc. there is of course a good variety of instruments one could trade longer term with the necessary volatility and risk control. But obviously daytrading has its advantages - if one is able to handle the circumstances.
What seems to be "swinging in the subtext" of your post is that you think that trading intraday has to be a proper - and maybe the only - job. And if that is not possible trade longer term. That is of course also individual, but in general I would agree that daytrading needs a lot more focus and preparation then most people think it does.
Apart from destilling everything I tested so far and think to know down into a proper plan I have to say that daytrading for me appears to be more attractive then watching hourly or daily charts for days and weeks. Maybe it's also the hunting thing - but obviously one has to become a true hunter first...
What I don't like about (day)trading is the fact that it is a dry business without lots of communication/interaction except of this type. That has made it quite hard for me to really make the final step. On the other hand it offers the opportunity to a flexible and scalable income. And a still feel that I'm so close
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