Look guys .....
if you are becoming more experienced in trading you will have read that higher Timeframes generally are more reliable than Trading lower timeframes .........
I am not going to go into the detail here why that happens.....but generally .......I agree .....
However if you have good solid systems and strategies you can make lower Timeframes still pay......
lets look at the hypothetical math below
2 systems :-
System A pays out on average say a net 5% Return every 10 trades
System B pays out on average a net 2% every 10 trades
which is better in real terms if you have the time to trade system B ??
Answer
lets do the math - lets assume that both systems enjoy similar number of trade signals (per 1,000 bars)
in fact we dont even have to do that ...........all we do is devide one timeframe into the other and see where the returns are now
Assume System A is on the Daily TF
System A return = 5% on daily
system B - adjusted return to Daily returns
Baseline = 2%
4 hour (x6) = 12%
1hour (X24) = 48%
15min (X96) = 188%
5min (X288) = 576%
yes but thats assuming we are robots trading 24 hours a day ..........!!!
Can you see the theoretical returns here if you put the time in .........??
I will trade 96 times more often than the daily TF on the 15m timeframe ....as a 24/7 robot
even if you said above that you now only trade 8 hours a day live ......so take results all down by 2 / 3rds
but it still proves my point i hope ....
I take a decent 5% system on the Daily .....
I dilute it to just 2% for the lower TF action and slippage etc ......
I trade the 5 min TF for just 8 hours a day live
and i would still return 576% / 3 = 192% vs the same 5% on the daily for the same period .....
convinced ? .......
I have been for years .......and yes - of course I can do both at the same time !!!
have a good day
N
