No Timeframe

[DionysusToast]

A common question on here is "which timeframe is best to use?".

I would like to propose that the answer to this is "none".You should not be using any timeframe at all.

Here's a 5 min BUND from last night.

OK - so this looks fine right ? A 5 minute chart, all the candles nice & clear.

Why though do people put so much importance on any individual candle when so many people use them on so many different timeframes? If I said I used 4 and a half minute candles I'd be laughed at but people would have no problem with me suggesting the 1,3,5,10,30 and 60 minute timeframes could be used together to give a better view.

There's an 'expert' (that shall remain nameless) in a chat toom I visited room who talks of the 20 MA on their 1 min chart providing resistance, then says how you need to be careful as the 20 MA on their 350 tick hasn't been pierced yet, and that the 5 min 50 MA is close so that can't be ignored either.

Can it really be that all these MA's on all these different timeframes are relevant? Do they really provide real resistance? I would say no.

I would also say that people put far too much importance on indivindual candles instead of the overall movemement of the market. Is staring at those individual candles steering your attention away from what is important?

Now - here's my BUND chart from last night.

The tick count is 89 - which seems to suit the BUND, you could move this up but 89,100, 70, 75 - it doesn't matter. I could change it at any time and it wouldn't make the slightest bit of difference to what I do. I just use a setting where you can see lots of the action. 89 on the ES wouldn't be very good as you'd not see so much action. The timeframe is irrelevant.

Whilst the time frame is not important, the compression of the chart is. Once you compress the chart, you are effectively making the individual candles unreadable yet still seeing all of the significant price action. You see the wood but not the trees.

You can see the same double bottom on both charts but on the latter chart you can see it in context of the overall price move for the day (and prior days). I did take the trade at that point based on what was also happening on DOM/T&S. I am not advocating taking all double bottoms. It didn't give me much anyway...

I have been looking at charts like this for only about a month now. The result is that I place less trades but the ratio of winners to losers has increased.I get less bored for some reason too - I am not sure why this is but I am much more relaxed.

So - from here on in, I would like to propose that the answer to "what timeframe should I use" is "None".

 

[Mr Flibble]

Candlesticks and all other price action charts are for lazy persons who dont want to spend some serious eye time on the movement of price alone. Try this for one day. Look at you chosen market and just watch the price ticker change. A candlestick will not show you a very important factor in the market imo, the speed in which a price moves through a given range. If a price is moving slowly in one direction and pings down with ease i have my edge that others do not. I also watch for resistance and support levels on very small timeframes and also double or triple point moves which again wouldnt be shown on any timeframe candlestick.

 

[timsk]

Hi DT,
I completely agree with your comments about MAs, but not many other members will! In fact, I fear you may be in for some heavy duty tongue lashing from those who believe that MAs provide solid S&R exactly in the way that your nameless 'expert' suggests.

Regarding timeframes, I'm 90% with you on that too. To anyone who hasn't used a non-time based chart such as P&F or Renko, I recommend them enthusiastically. That said, traditional candle or bar charts do have their uses. E.g. a volume 'blow off' shows up very well on time based charts.
Tim.

 

[ronblack]

Try to use the time frames and MAs professionals use and try to be as quick as they are. This is the answer. For you to see what they use you better pay a visit to a trading floor of a major bank, CTA, fund or proprietary trading house. Since it is hard to get in there if you have no friends, go to the bars these people gather after work and get aquainted with a few of them.

 

[dealer911]

Try to use the time frames and MAs professionals use and try to be as quick as they are. This is the answer. For you to see what they use you better pay a visit to a trading florr of a major bank, CTA, fund or proprietary tradign house. Since it is hard to get in there if you have no friends, go tot he bars these people gather after work and get aquainted with a few of them.

Have worked on a couple of prop desks at Investment banks and a hedge fund and I have never seen any "professionals" trading on any time frames at all or using MA's at all - it just doesnt happen.. maybe at some of the trading arcades people trade that way but HF traders use TA as a tool for monitoring purposes and never to generate trading ideas..
Back to DT's point about no time frames i would tend to agree.. looking at 3,4,5 min candles is not a very reliable indicator - The only reason I use any time frame at all is so I dont run my losses for an indefinate period!

 

[advfntrader]

so you still define support / resistance areas of higher time frame charts then use tick chart to see how price reacts at these levels ?

 

[DionysusToast]

Not as such. I do watch the high/low of day for the past 2 trading days but between the high and low of the prior days, there's no levels of interest to me.

Most of the time, I just pick up levels from here : http://www.mypivots.com/dn/?symbol=317

I keep 2 handwritten journals on my desk when I trade and I write the key levels at the top of the page as the first thing I do when I start for the day.

I will occasionally look at the 15 min chart compressed to show the last 7 or 8 days.

Thus far today, we've had action around the central pivot and R1. I was long at 09:55 CET when the price went up to R1(132.03) and the price action totally changed at that point, so I got out at 132.00. It came off 17 ticks at that point, so I was pretty happy to be out 3 ticks below the high (which it blew through whilst I was in the gym).

I can't watch the tape all the time, I can only make sense of it in short bursts (Goldfish attention span). I only want to look at it at key levels because these are often places where people have targets or are spoofing.

 

[Black Swan]

Candlesticks and all other price action charts are for lazy persons who dont want to spend some serious eye time on the movement of price alone. Try this for one day. Look at you chosen market and just watch the price ticker change. A candlestick will not show you a very important factor in the market imo, the speed in which a price moves through a given range. If a price is moving slowly in one direction and pings down with ease i have my edge that others do not. I also watch for resistance and support levels on very small timeframes and also double or triple point moves which again wouldnt be shown on any timeframe candlestick.

Breathtaking...

 

[DionysusToast]

Breathtaking...

Mr Swan - I don't see you providing substantive replies on this site, just comments like the above. Perhaps I am wrong and have missed them, in which case I apologise.

I presume you take exception to Mr Fibbles comments and are a proponent of candlesticks.

Would you care to explain why you think candlesticks are not total nonsense?

 

[D70]

DT,
When you view ticks, you are taking away many markets. Only futures contracts will provide you with this data, right?

 

[Splitlink]

Hi DT,
I completely agree with your comments about MAs, but not many other members will! In fact, I fear you may be in for some heavy duty tongue lashing from those who believe that MAs provide solid S&R exactly in the way that your nameless 'expert' suggests.

Regarding timeframes, I'm 90% with you on that too. To anyone who hasn't used a non-time based chart such as P&F or Renko, I recommend them enthusiastically. That said, traditional candle or bar charts do have their uses. E.g. a volume 'blow off' shows up very well on time based charts.
Tim.

This is the second time that you have picked at "ma experts". Since we had our bun fight, several months ago, I've moved on a bit- as we all do. I, still, use moving averages and pullbacks with very good results. A couple of my charts are on Swingin' FT 2010. To be frank, I don't see where the argument is! I'm not going to knock DT's theory . It's ok and I'm glad it works for him.

 

[Hilarymannah]

I find the best way to get through life is to find things that work, regardless of anyones "opinion",...
In other words,....if Toast prefers not to use time frames,..fair play, ....
I say, get on with "your" life and stop trying to influence others,..unless they specifically ask for you to help,... and even then, are you really helping?
These forums are useful,.. in order to elaborate differing perspectives,. nothing more!
In fact,.I think they are quite detrimental to the newbie

 

[DionysusToast]

DT,
When you view ticks, you are taking away many markets. Only futures contracts will provide you with this data, right?

I get tick charts for all market on Tradestation.

The ticks aren't important - I guess you could do the same with 1 min bars if you still compress the chart so you can't see the trees - just the woods.

 

[DionysusToast]

I find the best way to get through life is to find things that work, regardless of anyones "opinion",...
In other words,....if Toast prefers not to use time frames,..fair play, ....
I say, get on with "your" life and stop trying to influence others,..unless they specifically ask for you to help,... and even then, are you really helping?
These forums are useful,.. in order to elaborate differing perspectives,. nothing more!
In fact,.I think they are quite detrimental to the newbie

So your suggestion is that we all stop posting ?

 

[D70]

I get tick charts for all market on Tradestation.

The ticks aren't important - I guess you could do the same with 1 min bars if you still compress the chart so you can't see the trees - just the woods.

Is your point to compress the charts?
I thought you were delving into the realms of price representation, hence the use of "89 ticks".

 

[timsk]

This is the second time that you have picked at "ma experts".

Hi Split',
I've no idea what you mean and I'm not picking on anyone!
I was merely referring to a comment made by DT in his OP: "There's an 'expert' (that shall remain nameless) in a chat toom I visited room who talks of the 20 MA on their 1 min chart providing resistance, then says how you need to be careful as the 20 MA on their 350 tick hasn't been pierced yet, and that the 5 min 50 MA is close so that can't be ignored either."
Nothing to take offense at!

Tim.

 

[Hilarymannah]

Toast,....Read my post,...and ponder it, rather than reacting !
For some, it takes longer : )

 

[DionysusToast]

Is your point to compress the charts?
I thought you were delving into the realms of price representation, hence the use of "89 ticks".

It's the compression whilst keeping the intra-day swings visible.

The89 could be anywhere between 70 and 120 for the NQ. If the number is too big for the number of ticks/day then you don't see all the action. If the number is too small for the ticks/day there's too many bars.

89 just happens to show all the intra-day swings when compressed.

 

[D70]

Ok, I get your point.
I thought "everyone" did this anyway.

But also, to add to your point about tick data.
Be careful here because altho tradestation provides tick data. I doubt they are paying for live tick data from all sources. They will be providing their own mush up version. And fx tick data is almost pointless because anyone trading size, does it by swap.

But for gleaning wood from trees - absolutely. Good angle to present to those that havent got there yet.

 

[nunrgguy]

Wow is all I can say. Seem to remember starting a similar thread and getting laughed at by many...

Going long, price is either making new lows or moving away from them
Going short, price is either making new highs or moving away from them

Price goes up and down

That's all you need to know.

What you use to determine which way price is moving is up to you but it boils down to the same thing and the perrenial question 'what timeframe do you trade' actually means NOTHING apart from what arbitrary candle in your time compressed, lagging database do you use to determine an entry point.

Price is price no matter what chart you look at. If it's enough for you to have seen price moving a certain way from a price extreme for 5 minutes then that's a valid entry, if the next guy requires it to have moved a certain direction from a price extreme for 1 hour then that's also a valid entry point but his stop is likely to be much larger...it's what happens after that's most important.