Which Trend Line

[unpopular]

I notice that when looking at different time frames the trend lines sometimes contradict each other. The 5min chart could be showing an up trend while the hour chart is showing a down trend. which time frame should i pay more attention to? the longer one or the shorter one?

 

[timsk]

I notice that when looking at different time frames the trend lines sometimes contradict each other. The 5min chart could be showing an up trend while the hour chart is showing a down trend. which time frame should i pay more attention to? the longer one or the shorter one?

Hi unpopular,
Welcome to T2W. Unusual username, perhaps that will change when you've made new friends here!

Regarding your question, I recommend being wary of using words like 'should' and be especially wary of others who use words like 'should'! There are exceptions but, as a general rule of thumb, there are no 'shoulds' in trading - or very few at least.

Trend lines and moving averages frequently contradict themselves across different time frames. This is normal and to be expected. The only way that all time frames would consistently display trend lines or MAs that complement one another would be if the instrument you're trading only ever trended in a perfectly straight line. None do that I know of. If you ever find one, please tell me, as that will be an absolute dream to trade!

Many traders will look at two or more time frames and only trade in the direction of the longer term one. So, for example, if the daily time frame shows prices trending up, the trader will wait for the next opportunity to go long. They may enter their trades on the 60 minute time frame which, for the sake of argument, may be trending down. Within the context of the longer time frame, this is known as a pull back. As and when the 60 min' reverses back up, the trader will then take the long trade. If you've not yet seen it, this thread may be of interest as it expands on this idea in greater detail: The 3 Duck's Trading System.
Tim.

 

[Fugazsy]

if your TF is the 5m then I suggest you look only at that TF, you can zoom it out completely to give you an overall feel (see chart, GA).

You are right too many contradiction in trading......making it simple is a good way in my view.

 

[unpopular]

Hi unpopular,
Welcome to T2W. Unusual username, perhaps that will change when you've made new friends here!

Regarding your question, I recommend being wary of using words like 'should' and be especially wary of others who use words like 'should'! There are exceptions but, as a general rule of thumb, there are no 'shoulds' in trading - or very few at least.

Trend lines and moving averages frequently contradict themselves across different time frames. This is normal and to be expected. The only way that all time frames would consistently display trend lines or MAs that complement one another would be if the instrument you're trading only ever trended in a perfectly straight line. None do that I know of. If you ever find one, please tell me, as that will be an absolute dream to trade!

Many traders will look at two or more time frames and only trade in the direction of the longer term one. So, for example, if the daily time frame shows prices trending up, the trader will wait for the next opportunity to go long. They may enter their trades on the 60 minute time frame which, for the sake of argument, may be trending down. Within the context of the longer time frame, this is known as a pull back. As and when the 60 min' reverses back up, the trader will then take the long trade. If you've not yet seen it, this thread may be of interest as it expands on this idea in greater detail: The 3 Duck's Trading System.
Tim.

thanks for your reply. i really appreciate it

 

[Solas0077]

Trend lines are there to be broken.

 

[Splitlink]

Trend lines are there to be broken.

I would not say that! I try not to break mine but it, just, happens!. It's not you doing it, is it?

 

[dbphoenix]

I notice that when looking at different time frames the trend lines sometimes contradict each other. The 5min chart could be showing an up trend while the hour chart is showing a down trend. which time frame should i pay more attention to? the longer one or the shorter one?

Traders who have longer-term timeframes and traders who have shorter-term timeframes are fated to trade at cross-purposes only if the shorter-term traders don’t understand and accept that it is not they who are in charge. They just don’t have the money. And it’s money that moves markets. Shorter-term traders who understand that they are reactive will cultivate the patience to wait for those moments when traders trading more than one timeframe are all trading together and exploit that behavior for their own benefit. This dynamic can be seen most days when traders in more than one timeframe seek direction during the first thirty to ninety minutes. If nothing’s happening, they withdraw, and price drifts sideways for a while, sometimes for the rest of the day. The short-term trader who doesn’t understand what’s going on will try to force a trade out of this and will end up with little to nothing, or even a loss. The short-term trader who does understand what’s going on will sit on his hands and wait, and observe, and look for those clues which indicate that several categories of traders in several timeframes are on the same track and travelling the same train. This is most clearly seen during climactic highs and lows, when practically everybody is on the same track going the same direction but is also seen in the more low-key breakouts that often occur after extended sideways drifts during the morning session.

Db