Hello! When choosing a Time Frame, Do you guys expect your TP to be hit based on Time Frame? I mean if I pick Daily Time frame should I put TP that I expect to hit in a Day? If you trade 15M chart and it doesn’t move
much in a few hrs do you consider it wrong trade and close it?
I’m asking this because i’ve hard time looking at chart. one time frame always disagree with other time
frames lol. Should I just ignore other time frame when I already decided what time frame to trade? thanks!
No you should never ignore what other time frames are saying. Again this is one of those it depends answers. Ok so i personally suggest using multiple time frame analysis a minimum of 3 time frames. I personally use all time frames from 1min to weekly/monthly. But using the 3 time frame system pick a time frame you are comfortable with most people recommend 1 hour, i think that time frame is pretty good myself, I can definitely trade it. Now add 1 time frame above and one below to give you a bigger picture perspective and also allowing you to drill down and refine your entries or watch price more carefully as you manage your trades. Also time frames do not always disagree, if your system depends on the time frames being in alignment it just takes patience.
Now people usually think the only way the market can hurt them is price, but you are revealing something here that i find to be a truth. The market can also hurt you with time. Well if you are using daily TF and are setting at TF that can be hit in a day think about it. Would you set a TF on a 1h time frame that would be hit in 1h? Probably not. If you are then you are not getting a good RR ratio. Each trade will be different but have the way you set your TP based on the technical factors presented in the chart. The chart will tell you how much potential profit is being offered as well as any potential stumbling blocks. I personally do not cut off specifically for time but if i don’t like whats happening i will reduce risk. So if i don’t like it I will reduce my risk one of 2 ways, reducing my position size, or tightening my stop. I am in a trade right now that was off a daily chart and we have been going sideways for over 16 hours. I didn’t like was doing so i reduced my SL. I could have taken some of the position off but i saw a new technical place to place my stop tighter. Also we were just in Sydney and Tokyo sessions, they are the least volatile most ranging session. So you have to take that into account. Now if it was London and NY then it would be a different story.
So I guess the moral of this long rant is, Multiple time frames allow you to look at the big picture as well as xray into the price action developing and is a good component to use in any system. Also Time can hurt you just as much as price, so how to manage it is up to you but using the tools of position reduction and stop loss tightening you can adjust your risk to the situation without having to close the position entirely. Now of course you can always close the trade entirely. But with each decision you make, make sure its part of your system and you have a logical reasons to do so.
Hey guys,
Just joined babypips today.
I have a question.
I used to intra-day trade FOREX, off 15min-1hr charts. Now I moved over to trading from daily charts. For MM I risk 10% of my equity. I trade on 5 pairs, therefore 2% risk for each pair, that also includes taking into consideration adding spread diff to SL.
I normally put SL behind highs and lows, or on support/resistance levels. And I have seen for myself being stopped out at these levels. Several members have warned me from various FX forums, that these levels are where brokers tend to hunt for SL.
With the 15-1hr chart, I used to use SAR as a guide for SL, I never had problems trading the 15-1hr charts.
Now with Daily charts, one would have to be nuts to use SAR as SL, due to a huge difference in # of pips. Some have told me to trade naked, but that is insane, particularly for a daily chart. I normally don’t use TP, as I tend to let it ride, until PA or my indicator shows a possible trend exhaustion.
Is there anyone here experienced in trading off the Daily charts, who could shed light on where u would ideally place a SL on a daily chart? Would like to hear everyone’s thoughts ^^
Welcome to babypips. Actually I am coming from pretty much the exact same situation. Although it is not insane to trade naked, because that is what i do. To be honest if it was a good turning point your SL should never have been touched, i think a lot of newbies assume the broker is going after YOUR stops when in fact you just made a bad trade. Remember your new so no other time in your live will you trade as poorly as you do now. I personally use my version of S/R levels and place my stops behind them, only if i am wrong do they ever get triggered. My rate of price reaction based on my system is about 60%, going in the direction I want. Now I have also moved to the daily chart, because after some back testing of a couple pairs I realized I can up my success rate to about 80%. I only use pivots, fibs, S/R and any line I can draw myself basically.
I dont use parabolic SAR, but its good to hear you are using it correctly only to place SLs. Actually If you use pSAR on the daily i don’t think you we nuts actually nothing is nuts in trading, its just does it fit into a profitable system. More importantly YOUR profitable system. I know of a trader here on baby pips who uses %'s of ATR or the entire ATR for his SLs, and on average he knocks down 200-300 pips a week. I have seen him trade live as well. SO no having a qualms about using very large SLs if you can make them work for you. Now on the daily i still place them behind my levels which would be equivalent of S/R placement. This also accomplishes 2 things 1) the core of my system is based on this so if price reaches this point then my trading idea is wrong, and the market has proved me wrong therefore get out 2) it also allows me a technically significant place in order to place my stop giving it some ‘defense’ without having to place it even further away from that significant point causing a large reduction in trade size. Everything is a balance, and how you will make everything work for you. I mentioned earlier that I have the ability to trade any time frame, assuming I am allowed 1 above 1 below. So give me a 5min-15min-1H or 15min-1h-4h or 1h-4h-daily. I will place my stop in very similar looking places on each chart no matter the time frame, this is because of consistency of my system. If i didn’t tell you what time frame we were looking at the trades would all look the same. but it could have been a 15min or a daily chart.
Wow thanks for the quick reply. My post is in the wrong thread lol, but since I joined today, I was restricted from creating a new thread.
Thanks for the in-depth explanation. I like trading off the daily charts, not much to do with fundamentals & less time to spend. Lol but each time frame has it’s own pros & cons.
Using SAR on daily, my SL would exceed above 3000 pips. I know some traders have larger SL than this, but I have to take into consideration my equity. It is limited, therefore 3000 pip SL is not suitable for me. Am experimenting with Fib & learning alot more.
Is it possible to have SL as small as 100 pip on daily? But for that to happen, wouldn’t the trend have to be in my favour with a big thrust, thus way preventing a 100 pip move back?
I learned something from queen cleopiptrathat a stop should be placed at the point of ‘invalidity’ of your trade idea. So looking at the chart where are you wrong? I have been using that concept last few weeks instead of arbitrarily placing a stop on a pip limit and has been helping me greatly. Also if I am wrong then I feel I can then take the other side of the trade if I want.
With that said, I then try to hide my stop behind a psych level or key support or resistance area. I love to draw trend lines so for my short term trades I place the stop on other side of my line…which means if hit my line was wrong and trend has changed.
Btw cleopiptra (forum leader on here) is raghee horner. She has a good book out that explains this and is featured on fx street. I watch her quick videos she posts weekly or so also.
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