Timeframe

What is the best timeframe to use then pattern trading.

1 Like

Every trader have dif trading habits. It v individual qns. For mi is 10m

Price chart patterns are interesting - you can see http://thepatternsite.com for great details on how to recognise and trade them, also statistics on their frequency and success rates. Basically, they occur on charts because market participants follow set behaviour patterns when speculating. The patterns work as routes to profit because they can fail: if they were guaranteed not to collapse half-way through everybody would pile in and the pattern wouldn’t even print. So you must use a stop.

Bear in mind that forex does not close over-night, only over the weekend. This means opening and closing prices for a given day are not really at the open or close, as there isn’t any such thing Monday to Friday. This can make certain patterns less reliable than the text-books say, as a lot of then relate to patterns on stock charts and stock markets do have a daily open and close. If your TA also depends on highs and lows, maybe a high or low set while 80% of the forex companies around the world are closed and their staff asleep should not be trusted too much.

Depends on your startegy, but generally speaking, price action on higher time frames is going to be more reliable than price action on shorter time frames. The same goes for s/r levels too.

Agree. I suggest you use H4, D1 & W1 for trading. If you use timeframe lower than H4 than the spread will eat your profit and sudden move can cost you a lots.

1 Like

I totally agree with you and as everyone can see on higher timeframes the patterns have more probabilities to complete successfully in either direction. For example, triangles can be identified on daily charts as well as on weekly and monthly charts. On shorter timeframes the triangles may failed to give the suggested targets.

1 Like

I agree with the previous posts that this depends on your trading system and strategy. In general, many traders who trade during the whole day, placing multiple orders prefer to choose a shorter time frame unlike other traders who make just 1-3 trades per day, usually prefer a bigger time frame. But I’d say if you are still a newbie then perhaps you should use higher time frames as in the beginning trading with short time frames will be more difficult and less profitable due to the insufficient information. The shorter the frame is, the less information is displayed in the candlestick.

i use 1 minute frame. first i watch 1D,4h,1h,15m. than i have a general feel and follow the one minute. sometimes i wait for hours, sometimes i jump right in. i prefer to get out within 10 minutes, but sometimes it takes longer when my target of a couple of pips is reached. i prefer 1 trade a day. can’t handle the stress… :wink:

I use D1 for all purposes, but W1 to confirm trend decisions and allow comparisons of trend strengths between different charts.

I have 24 open positions, all with TA-based stop-losses set. I went out for a walk and a cappuccino this morning and have been painting fences all afternoon after a relaxed lunch watching “Mom” on TV. There is no stress. Stress leads to unhappiness and poor decision-making. I know what will cause me to enter and when I see the right confluence of data I enter. I don’t collate any other data whatsoever.

Pattern trading basically means you are looking for patterns that everyone else looks for too, and when the pattern is ‘completed’, every pattern trader comes in and moves the market together as one in the direction of profitability.

Hence based on this definition, you should look for the larger time frames for such pattern trading, the larger the time frame, the more time people have to jump onto the pattern trade when it occurs. The sweet spot would probably be the 4H charts or even the 1H chart I would think.

1 Like

yup, on a personal note i highly suggest higher time frames and longer trades it cuts the risk, scalping though will require you to stick to the screen on 10m 15m 1h time frames, but my cup of tea is at 4h 1d and even 1w with a simple 2-3 trades a week.

1 Like

But…have u consider the fundamental analysis also…coz it surely cause erratic movement to ur chart…unless u put big stop loss in place…

1 Like

Totally agree with u bro…it is a matter of analyse the traders behaviour more than to just ride with the trends…

Im sure having an undertanding of fundamental analysis if your a technical trader can be benefitial.

However, you can trade with pure technical analysis w/o using any fundamental analysis and vice versa.

Being selective and only trading strong price action @ significant s/r levels under the proper market conditions will allow a technical trader to employ a tight s/l.

Thats just my opinion, I know every trader and strategy is different.

1 Like

Thanks bro for the feedback…meaning to say u will hold ur trades for a longer period…am i right? Coz it is very troublesome when u have to consider the fundamental anaysis when u are the technical trader…

What is ur time frame to determine s/r level?
Thanks.

Winning trade: I will hold a winning position as long as possible. I dont trade with a T/P, but I make certain risk management adjustments at predetermined levels in the event price moves in my favor. I let the market take me out via a violation of a strong s/r level or I will wait for price action that gives a strong indication of a reversal before a s/r violation. I prefer the prior

Winning trades are difficult to manage because there is a combination of trying to let a position run, adding to a positon, moving your s/l while allowing space for a drawdown, etc, that can be tricky. And your doing this while keeping risk management a priority.

Losing trade: I employ a S/L every time and will consider closing a trade out early if price is at a certain % of the way to my S/L in relation to my entry. Its much easier for me to manage a losing trade becasue a S/L removes certain variables from the equation. I also have a quicker trigger w a losing position because I put more importance on minimizing risk than maximizing potential profit. To me, minimizing risk is the best way to maxamize profit

2 Likes

Monthly, weekly, daily for levels and I trade mostly the daily and the 4 hr at times.

Your welcome, happy to help in anyway I can.

Best of luck to you.

It depends on your own trading system and style as well! If you are a scalper, then you should use lower time frames like M30, M15! For swing trading H1, H4 is much effective!

off topic, but how many charts are you trading to have 24 open positions? the most ive ever had so far, even on demo, was maybe 8 open.