On a short term scale say 15-30 mins., what is the best momentum and trend indicators to use? I have learned that the shorter the time frame, the crazier it gets with these indicators, are there other ways that will be more efficient than others in showing short term trend?
Hi Pamskee, I understand your frustration. I am very much a beginner, but offer a look at my path.
Initally, I tried to trade very short charts - 5 to 15 mins. The results in terms of profitably were awful. I didn’t lose much money - fortunately. However the experience was both bitter and painful!! I using was 10 & 25 SMA’s and making decisions on crossovers. It looks as though it should be easy in hindsight, but it’s not. I think you will always be beaten by the spreads unless you are especially skillful or lucky.
You can’t keep doing the same thing and expecting a different result for very long if you are going to survive in this business. So I changed.
The longer I am following this game the more addicted I become to longer term charts. It is informative to see what monthly, weekly and daily charts have done, particually with regard to trends and this doesn’t take a lot of time. Currently have a look at GBPUSD. However, this does not help in terms of entering a trade.
My understanding of the information from the charts is that every trend is going to first be visible on the shortest chart. This is not helpful as the establishment of a trend is mixed in with many short term false movements that make it virtually impossible to discern which ones are the beginning of a trend. As I investigated more and more indicators and found that the ones people use as examples as confirmation of the indicator usefulness, it seemed to me that in the longer term you can get set in profitable trades more easily than in short term situations. Go back to the lesson on developing a trading system with the 5 & 10 SMA’s on daily charts - it works pretty well. If pairs range, on average, 80% of the time as I have read, a lot of the nice pips are in the early stages of the reversal.
Where all this is leading me is to making more use of trendlines and more particually support and resistance lines set up first thing every day on the daily charts. You will have noticed Big Pippin usually discusses his/her analysis relative to Daily, 4 hour and sometimes 1 hour charts. So far my research indicates this is pretty sound - as you would expect from such a brillant trader - and I make the following observations: when looking to trade - because my indicators are, for me, positive along the B P analysis - I will not enter a trade indicated by the 4 hourly if the 1 hourly is against it ie. will not go long on rising stochastic on 4 h if 1 h Stochastic is falling. However, I will sometimes trade on the 1 h even if the 4 h contradicts. This all goes back to the theory of the shorter timeframe being a better indicator currently. Entry can be further refined by checking the 5 or 10 min charts.
This is nothing more than a beginner’s ramblings, but I think support and resistance, properly drawn, offer great possibilities when used with momentum indicators. There is obviously a lot more to say on all this, but I probably don’t know it!!
I too use only S and R levels with trend lines for my trading strategy.
P.S.:What’s ‘B P analysis’?
[B]trying to catch big trend with short TF is a sure suicide…we can trade on small TF but stoploss must be small also and TP must considerable like 30 point for cable or 20 point for euro:cool…important thing is how much could satisfy ur desire not how much u could find in a whole day:[/B]