Please read if you trade off a 1 minute FX chart

[arabianights]

Have you ever seen the market gap more than 30 Mr Nights. The biggest i ever saw was 30 on the GJ while i was flat and 14 in May on the EU.

Yes.

And most to the point... if you want to scale up it doesn't particularly matter if there's a print somewhere for 1 lot... you still need liquidity to get out of your entire position while everyone else tries to outside of the nanny world of spreadbetting.

 

[MrGecko]

I don't think it has done. So what?

Heck even if it happens every 100 years (and I would expect it happens more than that historically in equivilant crosses)... that's a chance of 25% of blowing up in a 25-year trading lifetime. Want to take on those odds?

This argument to extend anybody that is either using leverage (price will gap to a point beyond the margin you have allocated the trade) or has taken a short position (and the price gaps up by more than 100%).

 

[LazyManForex]

Two things.

One, most people drop to smaller timeframe to reduce risk ala smaller stops. But what's the point of a 5 or 10 pip stop if the market can gap larger than your stop. Prevents you from leveraging as much as you would like.

Two, you can't develop a trading plan with impending doom, even if its once in a lifetime. Then you're like the guy who goes to a casino and keeps playing until his 100 bucks/quid is gone and calls it entertainment.

Three (an unadvertised bonus) is that I think It's really hard to overcome RT costs on the lower timeframe on an average basis. Ie after 100 trades and you've paid 200 pips in transaction costs, you better have a really high avg trade.

-The laziest man at LazyManForex-

 

[arabianights]

This argument to extend anybody that is either using leverage (price will gap to a point beyond the margin you have allocated the trade) or has taken a short position (and the price gaps up by more than 100%).

As you are well are you can guard against both those possibilities, albeit while accepting some counterparty risk OR you can arrange things such that these may happen, but once in a million years or so...

A 500 pip move ain't in the million year category... similarly someone who would be wiped out by an asset going to 0 or doubling overnight deserves it

 

[Sang Froid]

As you are well are you can guard against both those possibilities, albeit while accepting some counterparty risk OR you can arrange things such that these may happen, but once in a million years or so...

A 500 pip move ain't in the million year category... similarly someone who would be wiped out by an asset going to 0 or doubling overnight deserves it

I trade and live in a nuclear bunker.... you know just in case....

 

[Black Swan]

I trade and live in a nuclear bunker.... you know just in case....

LOL, nice one...

 

[GammaJammer]

btw it doesnt necessarily have to gap 500 points once. gapping 50 points 10 times won't do you any favours either....

Bottom line is, at micro timeframes, typical moves are far too high in relation to transaction costs (i.e. spread). Plus no-one trading serious money views this stuff as anything other than noise apart from the high freq. algo crowd, and you're not even gonna be in the same league technologically. So basically you're throwing darts at a board, and it's gambling, not trading. As long as you know there's a house edge and you're gonna lose your dough then cool. Just make sure the ride is fun.

GJ

 

[arabianights]

btw it doesnt necessarily have to gap 500 points once. gapping 50 points 10 times won't do you any favours either....

Bottom line is, at micro timeframes, typical moves are far too high in relation to transaction costs (i.e. spread). Plus no-one trading serious money views this stuff as anything other than noise apart from the high freq. algo crowd, and you're not even gonna be in the same league technologically. So basically you're throwing darts at a board, and it's gambling, not trading. As long as you know there's a house edge and you're gonna lose your dough then cool. Just make sure the ride is fun.

GJ

An eloquent and reputable person has put it much better than me. Kudos

 

[wackypete2]

What are you going to do if a market gaps 500 pips? It can do... even EURGBP.

This only has to happen once in your career and you're finished.

If you are in at a certain price and the market gaps against you 500 pips what diffference does it make what timeframe chart you are looking at??

If you can't trade off a 1m chart then don't...if you can then do.

Peter

 

[arabianights]

If you are in at a certain price and the market gaps against you 500 pips what diffference does it make what timeframe chart you are looking at??

If you can't trade off a 1m chart then don't...if you can then do.

Peter

The difference is because the shorter the time frame, the higher your leverage. Surely not difficult to understand?

 

[Shakone]

Only using 1-min charts for all trading decisions seems incredibly difficult and I haven't tried to do it. But looking for trades on a higher timeframe and then fine tuning using a lower timeframe, is a different matter imho. And while trading only off the 1-min will probably result in the trader losing, I still think they are useful charts.

Suppose I am trading a breakout long. I enter, and then look at my one minute chart at the bar that triggered entry, and price on that bar looks like it is moving my way. Great. Then on the next 1-min bar it reverses sharply and closes beneath the entry bar, and the next bar moves and closes even lower. I don't want to be in that trade long any more. I certainly don't want to wait for a 15 min bar or an hourly bar or even my hard stop to be hit to exit. It didn't do what I would expect it to do had it been a good breakout, and I'll not watch it move further and further against me because the big boys think 1-min charts are 'noise'. It isn't informationless noise when it is taking money from my account, it is giving me very clear info. That it might not have been the super breakout trade I was waiting for, and that if I get a chance to get out for small loss or breakeven, I should take it.

Now you don't need necessarily a 1-min chart for that, another trader might know it isn't working just from gut feeling that it doesn't have the momentum, and doesn't care what the 1-min closes or bars are, but you still arrive at the same decision.

 

[wackypete2]

The difference is because the shorter the time frame, the higher your leverage. Surely not difficult to understand?

1 lot on a 1m chart or 1 lot on a daily chart uses the same leverage, no??
You are not making any sense, only bad assumptions.

Peter

 

[arabianights]

1 lot on a 1m chart or 1 lot on a daily chart uses the same leverage, no??
You are not making any sense, only bad assumptions.

Peter

I'm making good assumptions. You can argue they're bad assumptions, but I will disagree with you.

As I said, a tick chart conveys all information that a 5 year chart does....

 

[wackypete2]

As I said, a tick chart conveys all information that a 5 year chart does....

But that wasn't the argument, was it. You are assuming, incorrectly, that if one trades using a 1m chart them they must be recklessly overleveraging their account. Again, 1 lot uses the same leverage no matter what timeframe you care to look at. A 500 pip gap would seriously injure most traders no matter what timeframe they are using.

Not looking for a p*ssing contest here, but if you can't trade off a 1m chart then don't. Simple enough.

Peter

 

[kimo'sabby]

1min screens are for mongaloids and autistic f*ck freaks with no sense of being normal. I love em.

 

[arabianights]

But that wasn't the argument, was it. You are assuming, incorrectly, that if one trades using a 1m chart them they must be recklessly overleveraging their account. Again, 1 lot uses the same leverage no matter what timeframe you care to look at. A 500 pip gap would seriously injure most traders no matter what timeframe they are using.

Not looking for a p*ssing contest here, but if you can't trade off a 1m chart then don't. Simple enough.

Peter

I am making the point that those trading off such charts are extremely likely to be trading short time frames as well:- and to trade very short time frames you need high leverage.

Trade such tiny timeframes with such high leverage and you gonna get raped.

Disagree with any of that? For sure I could have expressed it clearer but surprised I needed to spell it out

 

[wackypete2]

We're all good...

Trade such tiny timeframes with such high leverage and you gonna get raped.

Agreed.

to trade very short time frames you need high leverage.

Disagree, but I guess I am in the minority here.

I can scalp all day long using 1/2 lot and generally (not always!) do better than someone with a 1 lot swing trade thats sits around for a few days. I've used lower leverage and have less event risk. I don't know why everyone thinks short term trading/scalping must use higher leverage. In my world it's just the opposite, but I agree that MOST short term traders do overleverage, so your point is taken.

Peter

 

[MrGecko]

Everybody that uses minutely data as a pretty big net to cast your aspersions over, IMO.

 

[matrader]

1min screens are for mongaloids and autistic f*ck freaks with no sense of being normal. I love em.

me too

 

[Chartsy]

But that wasn't the argument, was it. You are assuming, incorrectly, that if one trades using a 1m chart them they must be recklessly overleveraging their account. Again, 1 lot uses the same leverage no matter what timeframe you care to look at. A 500 pip gap would seriously injure most traders no matter what timeframe they are using.

Not looking for a p*ssing contest here, but if you can't trade off a 1m chart then don't. Simple enough.

Peter

if you're trading off 1 min charts you want to make a living out of a few pips.
so you're obviously going to be trading with higher leverage than swinging for hundreds.
when 1 pip=1% of your account...you be fooked