[B][I]R Carter[/I][/B]
I agree. 1.6841 looks like the red line. For the time being.
If PA falls back to 1.6500 - 16600 level the issue of 4h highest high and advanced trendlines will solve itself. 
Stops…1d… +100 pips minimum…not my cup of tea. I stick to 4h. Very profitable it has been with those advanced trendlines.
Of course thats fine if your trading the weekly charts and set your lot size accordigly, theres no wrong or right TF chart, just the TF your comfortable with. 
The point I was making is there are lots of pips to be gained in between the weeekly chart. Most pro traders use either the 1h or 4h TF charts and theres plenty of movement within this range.
There is only time and price. TF charts are varying degrees of data compression. Nothing more. If price makes a weekly high or low, that’s significant and can be exploited for profit. If price crosses the weekly open, that is also significant. Do not think a weekly chart can not be traded intraday.
By the way, lot size has nothing at all to do with chart time frames. Lot size is a function of risk and stop loss.
Interesting observations. However traders in practise will select a TF chart to actually make the trade. An example might be looking to the 1h or 4h chart for significant S/R and time the entry using a 5m or 15m chart. If you can be in front of the monitors you would be looking to the shorter TF charts for entry and exits.
Lot size has everything to do with the TF chart your trading. If we accept you do not want to risk more than 1-2% of your balance you will want to set your lot size according to the TF chart. If your trading say the daily or weekly chart PA might move against your position by several hundred pips. Therefore you will want to set a lot size and stop loss to take this into account.
when GU got so high, I tried drawing fan lines on the 1day with pretty good results.
I trade off the 1h chart for now. but I do use the fan lines to get an idea of where price might be headed. Like I said before, it’s almost predictive. like having a crystal ball
First, let me say, “thank you”, for keeping this discussion/debate civilized. There are a few posters who could learn how to present their opinion without resorting to insults.
Lot size has nothing to do with chart time frame. Lot size is a function of risk and stop loss. There is no “time frame” to be comfortable with. You are confusing the representation of reality with reality itself. All charts above 1 tick are data compression.
Hmm… I see what your getting at but heres the thing. If you can be in front of the monitors during a trade then you can set a pretty tight stop and manually move it accordingly. But say you have a real job and can only look in on your trade once or twice a day? If this were the case it would be futile to trade the 5m chart. Better to look to the 1h and up. However in this case you would need to set a larger stop to take account of PA movement whilst you cannot constantly monitor the trade. If we are following good money management rules we presumably will want to keep our SL to no more than 2% of balance therefore the lot size will have to be scaled accordingly. Shorter TF charts smaller stop longer TF charts larger SL.
In addition its a truism that the longer TF charts will be a more accurate indication of PA the caveat is you will need to build in a bigger stop to take account of the ebb and flow.
Mike shrewd move with those daily fan lines. Try looking to the daily and keep the trade to the 1h. I entered a short on GU at 1.6830 using the daily and have hedged the 1h three times for short counter PA moves. Next major S/R 1.6615’ish.
R. Carter, obviously you have understanding of what you were taught and read. Unfortunately, you have been taught to believe in concepts rather than reality. This is not a personal attack on you. You have been debating me civilly and I am responding in kind. Please allow me to explain.
What is a 1 minute candle? It is a representation of all the ticks that occurred in 60 seconds.
What is a 5 minute candle? It is a representation of all the ticks that occurred in 300 seconds or in 5 one minute candles.
What is a 60 minute candle? It is a representation of all the ticks that occurred in 3600 seconds or in 12 five minute candles.
What is a daily candle? It is a representation of all the ticks that occurred in 1440 minute candles or 24 sixty minute candles.
It is all the same data. Some candles have more “compression” than others.
Look at a 1 minute chart starting at 12:00 and 60 minutes later, it has the exact same data as a 60 minute candle that started at 12:00. The open price is the same. Ditto for the high, low and close of the 60 minutes that passed.
When traders talk of “trading 5 minute charts”, they are mistaken. The clock on the wall doesn’t care what chart you are looking at. The price on the 1 minute chart is exactly the same on the 5 minute and 60 minute charts.
[I]
“The map is not the territory is a remark by Polish-American scientist and philosopher Alfred Korzybski, encapsulating his view that an abstraction derived from something, or a reaction to it, is not the thing itself,”[/I]
[I]We say the map is different from the territory. But what is the territory? Operationally, somebody went out with a retina or a measuring stick and made representations which were then put on paper. What is on the paper map is a representation of what was in the retinal representation of the man who made the map; and as you push the question back, what you find is an infinite regress, an infinite series of maps. The territory never gets in at all. […] Always, the process of representation will filter it out so that the mental world is only maps of maps, ad infinitum.[/I]
If you understand that charts are just “representations” of ticks then you will laugh at absurd statements like, “anything under a 60 minute chart is noise”. If that statement were true, then by logical inference, all charts are noise.
Next, stop loss has nothing to due with the chart time frame. Stop loss is a function of risk and position size:
[B]RISK = POSITION SIZE * STOP LOSS.
STOP LOSS = POSITION SIZE / RISK.
[/B]
Risk is a percentage of your account balance. Most say never risk more than 2%. I have read some people risk as much as 5%. Do not confuse risk with position size. No matter what system a trader uses, trade risk must be determined first. Then, you can either choose a position size or the stop loss. The value for whichever one was not chosen, is determined by the above equation. Time frame is not a factor because time is time and passes second by second. The chart you are watching doesn’t matter. Time will pass and price will move the same on all charts.
If you have a real job, want to trade and can’t monitor the computer then you need to find an entry that will give you an “edge” so your TP is hit more often than your SL.
“its a truism that the longer TF charts will be a more accurate indication of PA” is a false statement and is logically unsound:
An argument is sound if and only if
If it were true then we would be trading yearly candles or higher.
Please do not take my rebuttal personally. The focus is on the subject matter and I mean no disrespect.
[B][I]xtraction[/I][/B]
Very clever what you are trying to do here.
High frequency trading has proven your concepts ad absurdum, already. And it will more so in the future.
That’s what you call ‘deep in the box’ even I recognize that. Interesting to note that price action is basically self similar at all scales, within certain limits. there are differences clearly, but the principle is there.
[B]Extraction[/B]
I’m far from offended… I found your piece a very enjoyable read.
Ok lets hit your argument head on. Of course PA is the same on all charts in relation to how far its moved up or down thats a given. However and crucially… people will trade PA very differently according to the TF chart.
Try putting up a 5m, 15m, 1h, 4h, day, etc chart and a 20:2 bollinger band. Ok you will find that broadly PA on all charts will zig zag between the outer boll bands across the center boll band. Why because within each TF chart PA will become either over bought or sold. Thats why there are S/R levels on all TF charts… but the longer the TF the greater the relevance of the S/R.
I’ve been a pro trader for 30 years and let me infatically tell you the longer TF charts are a more reliable indication of what PA is doing within your chosen TF trading period. I entered a short trade on GU three days ago based on PA being over bought on the daily. The trade was managed on the 1h chart. I closed it out Friday afternoon at just shy of 400 pips.
This is the difference between an intellectual trader or analyst and an experienced trader. In large institutions and Banks the analysts advise but the traders trade… however I will take your instruction on what I have learned and read under advisement.
No offense intended either. 
The Stop Loss is directly proportional to the TF chart your trading. I wouldnt use a 50 pip stop on a 5m chart where PA range within the S/R levels is 30 pips. But I might well use it on the 1h chart where PA is ranging within a 150 pip S/R range.
I think you would benefit from a long hard look at the variuos TF charts and how people [B]actually[/B] trade them rather than explaining to me the general theory of PA and SL.
Sorry… completely lost me on this one???
An arguement is sound only if its valid? All of its premises are true? An arguement is by definition two opposing views. Take the death penalty… I could argue with equal conviction for either view point. Whether either or both are valid or true is completely besides the point.
Valid and true is subjective… reminds me of my law degree days and Jurisprudence and lets not even go near politics.
Bottom line do you make consistantly profitable trades? I know I do… nuff said.
Could you be more specific?
What makes you think I am talking about high frequency trading?
Bollinger bands have nothing to do with price action. It doesn’t matter to me what time frame charts I am looking at because my reference points are always the same. For example, 2 points I use are last week’s high and low price. They are the same on all time frames. Their values are not debatable like S/R values. The chart above is the weekly chart. The chart below is M15 time frame for the past week. The lines didn’t change. Perhaps now you can see the illusion.
You still haven’t seen through the illusion of different time frame charts. Keep trying. I know you can. Set your beliefs aside and you’ll understand. I have been where you are and I understand your reluctance. Before computers, were there different time frame charts? How did people trade then? Tape reading? Does that help?
If you have been around trading for 30 years then you know 9 out of 10 traders are losers. I insulate myself from them. There is no benefit to be derived other than amusement at their folly.
You must not be a student of logic. A quick study on wiki could get you up to speed.
In logic, an argument is a set of one or more meaningful declarative sentences (or “propositions”) known as the premises along with another meaningful declarative sentence (or “proposition”) known as the conclusion. A deductive argument asserts that the truth of the conclusion is a logical consequence of the premises; an inductive argument asserts that the truth of the conclusion is supported by the premises. Deductive arguments are valid or invalid, and sound or not sound. An argument is valid if and only if the truth of the conclusion is a logical consequence of the premises and (consequently) its corresponding conditional is a necessary truth. A sound argument is a valid argument with true premises.
Each premise and the conclusion are only either true or false, i.e. are truth bearers. The sentences composing an argument are referred to as being either true or false, not as being valid or invalid; deductive arguments are referred to as being valid or invalid, not as being true or false. Some authors refer to the premises and conclusion using the terms declarative sentence, statement, proposition, sentence, or even indicative utterance. The reason for the variety is concern about the ontological significance of the terms, proposition in particular. Whichever term is used, each premise and the conclusion must be capable of being true or false and nothing else: they are truthbearers.
Yes, to your last question.
[B]Extraction[/B]
I dont have time for this … clearly your no trader. Big on long paragraphs of patronising twaddle on how and why I and probably everyone else is doing it wrong but zero on how to do it right. Sadly… I see this type of posting alot.
Neither do the rest of us. Extraction, if you are interested in sharing a method of trading that you feel is profitable and one that others might like to learn, please start another thread. I also don’t have time to read arguments that don’t seem to be heading in a positve or constructive direction. Your input is appreciated, but use it in a better way with a new thread.
