Trading time frames

Hello all, I am new here to the forum, as well as in trading.

I am just curious what others traders are doing in respect to time frames. For now I do not have too much money to risk; therefore, I am trading in small time frames to get in and to get out quick. I started on 1h time frame, but now I am trading on 15min, as I do like the fast pace; however, there is a lot of volatility here, and I am seeing myself being quick out a lot, before it turns around and go toward my profit.

I trade long and short, depends on my analysis and the trade indication. I am trying to use the Camarilla lines for enter point, target and stop.

Welcome to BabyPips.

That comment suggests to me that maybe your stop-losses are too tight?

They vary all the way from 30-second charts (known as “S30”) to weekly charts (known as “W1”). In fact they can vary even more widely than that, from ultra-fast tick charts to monthly charts.

The big division, or distinction, is between intraday traders and longer-term traders, i.e.between those who hold positions overnight and those who don’t.

Daytraders are typically using M5 and M15 charts.

Longer-term traders are typically using H4 (and/or H8 and H12) and daily charts.

It’s about what suits your tastes, preferences, ambitions and of course availability to trade.

I’m slightly surprised to hear it, I must admit. Are you aware of any objective evidence that shows that those levels actually confer any statistically significant edge?

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I must be going against the grain then - I use the H1 chart only for intraday trades, although with that being said I get on average 10 opportunities per month, so it adds up. Ironic though as I went on a lower time frame and the profit factor decreased in correlation to reducing such time frame.

FYI - you were spot on with fictitious and artificial in a previous post. It appears I need English lessons too!

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That’s interesting.

I’m surprised you can find as many as 10 trades per month, from 1 hour charts. (I’ve never used them, myself.)

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Thank you so much for all your responses.

For the Camarilla, I got as recommendation, and then I watched some YouTube videos about it. I try to confirm it with previous structures. I plan my trades also checking the long time frames as D1 and H4.

I am going to take a different approach as I place my stop, and hopefully I can get this trade thing going for me.

I wish you good luck with it, but I believe there’s never been any objective, statistically valid evidence that it “works” at all. There’s only ever been anecdotal evidence with huge selection-bias.

Certainly, at least looking at it superficially (which is all I’ve ever done, myself) there’s no apparent logical reason why it would, or should, or could work at all. It’s based only on a formula, not on actual levels of support and resistance of prices.

If you’re going to adopt the “draw a line and trade away from it” philosophy (which is certainly not an unreasonable one, in itself), in my opinion it makes sense for the lines you draw to be based on previously observed levels of price and resistance, rather than on an abstract numerical theory. Alexander Elder explains why (in great detail) in his book “Trading For A Living”, which I recommend.

For these reasons, I’d respectfully suggest that a different approach from the Camarilla equation, to position your levels of anticipated S/R, might be helpful to you.

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I also use the H1, and find myself opening about a dozen positions per month. While I assume my strategy is completely unrelated to @RISKonFX, it’s interesting to see the similarity in signal numbers.

I like the balance the H1 strikes - I’m not holding positions overnight, but I also don’t need to monitor the trade as closely as I might on the lower time-frames. I typically set pending orders over my morning coffee (if I see a signal) and then check in periodically while I’m at work.

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Thanks - some interesting conversation, here.

So, if you’re using H1 signals but not holding positions overnight, you’re presumably rejecting later in the day signals from which you’d trade earlier in the day? Or have I misunderstood something?

I strongly second this recommendation, with two caveats.

First, there is new version of the book called, intuitively, ‘The New Trading for a Living’. 90% of the book is the same, but a few things have been updated. Unless you can get an older copy at a discount, you might as well get the new version.

Second, Dr Elder primarily trades stocks and commodities, and actually expresses a fairly dim view of forex trading. His criticisms, while both valid and insightful, should not be taken too much to heart. Every instrument has advantages and disadvantages, and for most of the people on this forum, the low barrier to entry in forex outweighs all other considerations.

No, you have it exactly. Since my trades typically last between 2-5 hours, I generally won’t open a new position after about 12:00 UK time.

Agreed here too. I’ll focus on pre European and London open. 2pm UK time is my cut off as the analysis, which is always based on the previous day, becomes irrelevant.