I know some people prefer to hold trades over seconds, while others prefer over hours, and others over days, and so on. It seems intuitive that the shorter your time-frame, the more statistical and technical your trading decisions are, and the wider your time-frame, the more comprehensive and politically/economically-driven your decisions become.
In the shallow end of the pool, with minute, 5-minute, 15-minute, and hourly charts, how much self-similarity can I expect to see? For example, if I find that a certain indicator combined with candlestick shape analysis works well to predict short-term trend reversals on minute charts, can I reasonably expect that same technique to work on 15 minute charts? Hourly charts? At what point do outside factors dominate the “noise” statistics?
Obviously indicator parameters might need adjusting, but are techniques generally applicable across a range of charts? And if so, what sort of range might that be?
As far as between 1minute to 1Hour charts I’ve personally found it’s the exact opposite of what you are pre supposing. Technical analysis holds up better on longer time frames. Indicators and candlestick patterns are more reliable the higher in timer frame.
As far as consistent similarity, it never is exactly the same from trade to trade, set up to set up. You can have a good trade you think set up perfectly, then see it the exact same way at another time and have it behave tottally differently.
I like to trade on where the hourly trend is going. I’ve found that the indicators work accross the different time frame, BUT and this is a big but, if it’s in opposition of the hourly trend the movement in that direction may not be significant enough for a decent trade other than a quick scalp and may even suddenly retrace.
I use the hourly chart and trade on peaks and valleys. I then use the same indicators as a filiters and for exact entry. So, say I think the H1 is going up because it looks like it’s forming a valley. (which I caught a good 200 pip move today) I then look at the 15M, 5M, &1M. to see if they are headed down or up or in a position that leaves room for a move up. This way I have a good chance of coming in the trade positive and use any gained pips for breathing room/occillation.
As far as between 1minute to 1Hour charts I’ve personally found it’s the exact opposite of what you are pre supposing. Technical analysis holds up better on longer time frames. Indicators and candlestick patterns are more reliable the higher in timer frame.
Really? That surprises me… I thought that on a short time frame the market is reacting in a “knee-jerk” fashion - something that you could see by looking at a technical analysis - and that on wider time frames traders are making decisions based on what they’re hearing on the radio/tv/etc. Maybe the really short time frames are just [I]too[/I] volatile/noisy for any meaningful technical analysis.
I use the hourly chart and trade on peaks and valleys. I then use the same indicators as a filiters and for exact entry. So, say I think the H1 is going up because it looks like it’s forming a valley. (which I caught a good 200 pip move today) I then look at the 15M, 5M, &1M. to see if they are headed down or up or in a position that leaves room for a move up. This way I have a good chance of coming in the trade positive and use any gained pips for breathing room/occillation.
That makes sense - using the larger time frames to make the general analysis, and then the short time frames to decide on the particulars. Thanks!