Hello DE,
So I’m going to give a long answer to this as it needs some unpacking - since its actually a loaded question.
I think we have to question the term ‘other experts’ in this case because they offer no evidence, stats, or proof the 4hr/daily are superior. Yet I do, which I hope separates me in some sense.
I think its a sophomore mistake to just claim the best trading signals are on specific time frames. Do you really think banks and institutions (which a bank trader could execute 20-100 trades a day), is doing this solely on the 4hr/daily charts?
Unlikely.
If you learn how to read price action, you’ll realize two important things, which are;
- you can do this on any time frame, once you learn the skill
and
- good signals are not dependent upon the time frame, but the actual Price Action Context itself (which can manifest in many different ways, regardless of the time frame). My students find them all the time across all time frames, small and large.
I have some students trading the 5m-30m TFs, while others only the 4hr/dailies. Yet both are making money.
The whole argument ‘4hr/daily time frames are better’ is the most puzzling one, because those who espouse it, haven’t realized the complete irony and conflict in their argument. They state the argument like the following;
- pin bar signals on higher TFs are more reliable than on a 5m chart.
[I]but here is the kicker[/I]
- they also state [B]that we never take/trade any pin bar,[/B] that we have to trade them in ‘[B]context[/B]’ based on the price action [B]story[/B].
So they state pin bars are more effective on higher TFs, yet don’t trade every pin bar on the higher TFs, because we have to use the surrounding context/story of the Pin Bar to verify if its a good signal.
Do you see the irony and actual contradiction they are stating?
That we shouldn’t trust lower TF pin bars, because they are less efficient by themselves…but, they also admit they don’t trade [B]ANY[/B] pin bar by itself (regardless of the time frame being higher), because we have to partner it with the context/story.
Do you see it now how this is a complete contradiction and confusion?
But this is the crucial point i’m trying to make here…
When you are trading a 5m chart, a 30m chart, a 1hr, chart, or ANY time frame chart - you are always using the [B]context/story around the price action[/B] (be it a pin bar, inside bar, engulfing bar, etc.) to validate the actual signal.
So it actually is [B]NO DIFFERENT[/B] when trading a 5m, or 4hr chart, because you are a) trading a signal, but b) verifying the signal based on the context/story around it. You are using the same tactics, regardless of the time frame.
I’m not just trading a pin bar because it shows up on the daily chart, nor am I doing this on the 5m chart. I’m reading the price action context around the signal, and determining if its a high quality signal or not.
And these high quality signals happen all day on any time frame.
Yesterday I took one on the 5m chart that had a 3:1 reward to risk play and was done in 15mins. It was the same price action formation I’d trade on the 1hr, 4hr or daily - no different.
So hopefully this clarifies things around the confusion about higher TFs, and how I approach price action trading differently.
Kind Regards,
Chris Capre
