There are lots of opinions on this. I believe that you have to come to a decision, yourself, as to which direction the Daily FT is going. Even that can be wrong.
Once that you have decided on direction----down, for example, you should endeavour to find the top for the day and enter a short position there. If you enter on opening, then you are, more or less, telling the market which way it has to go to please you. . This is not logical, although lots of traders do it because they work better knowing that their rules have been obeyed, even though they lost on the trade! You should work on the law of probabilities and if you think that the daily direction is down, you look for the tops on the intraday.
SR lines? I like the hourly chart for this.
Personal opinion
, I'm sure lots will not agree.
I mentioned the FT and I see that you are an American. Take no notice. Any index or share will do.
Once that you have decided on direction----down, for example, you should endeavour to find the top for the day and enter a short position there. If you enter on opening, then you are, more or less, telling the market which way it has to go to please you. . This is not logical, although lots of traders do it because they work better knowing that their rules have been obeyed, even though they lost on the trade! You should work on the law of probabilities and if you think that the daily direction is down, you look for the tops on the intraday.
SR lines? I like the hourly chart for this.
Personal opinion
, I'm sure lots will not agree. I mentioned the FT and I see that you are an American. Take no notice. Any index or share will do.
There are lots of opinions on this. I believe that you have to come to a decision, yourself, as to which direction the Daily FT is going. Even that can be wrong.
Once that you have decided on direction----down, for example, you should endeavour to find the top for the day and enter a short position there. If you enter on opening, then you are, more or less, telling the market which way it has to go to please you. . This is not logical, although lots of traders do it because they work better knowing that their rules have been obeyed, even though they lost on the trade! You should work on the law of probabilities and if you think that the daily direction is down, you look for the tops on the intraday.
SR lines? I like the hourly chart for this.
Personal opinion
I mentioned the FT and I see that you are an American. Take no notice. Any index or share will do.
Hi Splitlink,
Thanks for you response. Let see if I fully understood you.( I just opened a demo so please bear with me)
So I would first determine the trend on a Daly chart..most current Daily candle bullish/bearish and from the same Daily chart determine S/R back several previous days. Correct? Or would I select S/R from I H TF if I select that TF to enter my trade and then go long or short according to Daily trend.
Do I take into consideration long term Daily trend as well like several candles back, or only most current Daily candle trend?
Hope I made this clear.
Thanks again
Hi fastfx,
I'm posting three charts covering the 27th May, The daily one is where I form an opinion on direction for the next day. I think that this leg was fairly easy, often they are not so. For instance the last three days have been risers. Are we in a new trend? Who knows, but I have decided that we are still down---today, at least. It's something that you have to decide for yourself and it's the most important part of trading. Get that right and you can't go far wrong.
The hourly chart will help you decide where the main SR lines are. Then go to the 5 min for entry.
My system is trend following. Trend turning is, IMO, more difficult, because a trend gets more difficult to turn the longer it gets.
New trends are well dealt with in Swingin' Ftse2008 on the UK Indices forum
http://www.trade2win.com/boards/uk-indices/28003-swingin-ftse-2008-a.html
Hope this helps you.
Regards Split
I'm posting three charts covering the 27th May, The daily one is where I form an opinion on direction for the next day. I think that this leg was fairly easy, often they are not so. For instance the last three days have been risers. Are we in a new trend? Who knows, but I have decided that we are still down---today, at least. It's something that you have to decide for yourself and it's the most important part of trading. Get that right and you can't go far wrong.
The hourly chart will help you decide where the main SR lines are. Then go to the 5 min for entry.
My system is trend following. Trend turning is, IMO, more difficult, because a trend gets more difficult to turn the longer it gets.
New trends are well dealt with in Swingin' Ftse2008 on the UK Indices forum
http://www.trade2win.com/boards/uk-indices/28003-swingin-ftse-2008-a.html
Hope this helps you.
Regards Split
Attachments
H Splitlink,
I think I understand now the connection between S/R of various time frames.You established resistance on a hourly chart and use the same price in 5 mi chart to enter. That was a puzzle for me. To establish the Daily trend you used actual long trend of many days and not only 1 day candle.
Any reason why you chose 5 mi chart for entry and not 15, 30 or 1 h chart? I like to know the advantage/disadvantage of choosing 1 t.f over the other.
Is it also true that we should only trade in the direction of a daily trend and ignore other shorter time frame signals ?
Glad you were able to post the charts. Very helpful. So appreciated.
I think I understand now the connection between S/R of various time frames.You established resistance on a hourly chart and use the same price in 5 mi chart to enter. That was a puzzle for me. To establish the Daily trend you used actual long trend of many days and not only 1 day candle.
Any reason why you chose 5 mi chart for entry and not 15, 30 or 1 h chart? I like to know the advantage/disadvantage of choosing 1 t.f over the other.
Is it also true that we should only trade in the direction of a daily trend and ignore other shorter time frame signals ?
Glad you were able to post the charts. Very helpful. So appreciated.
That's the way I work but not everyone has the same idea. I believe that, once the trend is decided on a daily basis I can assume that the probabilities of a lower low, (or a higher high) are good. Therefore, any contrary move is an opportunity to enter in the direction of the trend.
There is no reason why a lower time frame can't be chosen. Any lower timescale can be used for an entry. It depends on the trader's character. A longer TF means a stop loss farther away. Not everyone can live with that, so they reduce the TF.
Nothing is true when it comes to methodology. What I would say, though, is that once you have found the TF that you like, stay with it. Don't have second thoughts about what you are going to do.
Good trading.
Split
There is no reason why a lower time frame can't be chosen. Any lower timescale can be used for an entry. It depends on the trader's character. A longer TF means a stop loss farther away. Not everyone can live with that, so they reduce the TF.
Nothing is true when it comes to methodology. What I would say, though, is that once you have found the TF that you like, stay with it. Don't have second thoughts about what you are going to do.
Good trading.
Split
I like this system of yours and i'm going to try it over the next few days but do you have to check intraday?(every 2hrs or 4hrs etc...). I want to know, so that if the trend should turn against the direction, i can make amends.
I also feel that an indicator like the stochastic oscilator will help in determining the direction.
This thread is highly appreciated.
Segyem
I also feel that an indicator like the stochastic oscilator will help in determining the direction.
This thread is highly appreciated.
Segyem
Sure, it's just an idea and you can use any add ons that you like if it helps your decisions.
Your question. Once I have decided on the direction I don't change, for that day. That said, I don't always get the top so I have to get out and go in again later. However, I don't reverse direction.
Have a look at the SP500 for Wednesday and use the same time frames that I posted above. I traded that day, using that system and I rode the fall all the way to the close. See how the hourly peaks go back to June 27 and make a resistance line with the following hourly peaks?
Split
Your question. Once I have decided on the direction I don't change, for that day. That said, I don't always get the top so I have to get out and go in again later. However, I don't reverse direction.
Have a look at the SP500 for Wednesday and use the same time frames that I posted above. I traded that day, using that system and I rode the fall all the way to the close. See how the hourly peaks go back to June 27 and make a resistance line with the following hourly peaks?
Split
