One timeframe or multiple?

One timeframe or multiple?

In my opinion, it depends on the type of trader you are. Here I’m mainly thinkin of a trend trader, but it doesn’t have to be a huuuuuge trend… just a nice move.

If the 1hour chart gives a long signal, and the 4hour chart gives a short signal you may be buying a retrace – so don’t expect a big move.

So if you are a trend trader, other timeframes are obviously important.

I looked up once how can you tell if a pair is retracing or reversing….

The best answer I took was ‘’when it retraces too far and doesn’t stop, it’s a reversal’’

So the thing is, that drives me bananas, when you think you see a good thing on the 1 hour for example, then check the other timeframes, it might put you off takin the trade… then you check back later and kick yourself. (My foot is in bits!) Like it would have been the perfect entry and now it’s either too late or it’s too dodgy to enter atall atall……………. So sometimes I think should I look at all or will it scare me off.

Is this time to practice ‘’patience’’ and be sure to be sure, till we see some other confirming sign on another timeframe? Or do we get in while we can?

What are your opinions?

6 members like this

Comment by kay on July 6, 2012 at 2:59pm: Totally agree with you on this Lisa, must point out tho, more than a few city traders I know use the 30M for day trades and entry exits, and the daily charts for key levels. Cheers

Comment by kay on July 6, 2012 at 5:01pm: Lol. Love the way you humor everything you say
:)

Comment by Peter jcp on July 6, 2012 at 5:09pm: Hi Gill

For my own style of trading - I love multi time frames - to paint me a "picture".

I well over analyse and as far away from a "keep it simple" trader as possible - but that's just me and I am would not recommend all traders doing the same - as my ways are not easy and totally non - conventual and not for all;-)

Its one of the topics we will be discussing in the ForeXmosgate group soon and invites will be forth coming in July.

As a basis - trading is a world wide business and we all live in different time frames - that as an effect on charts.

All Charts up to 1 hour - we all see the same around the world - whether in Singapore Ireland or Mexico. All the rest including dailys weekly's and monthly's will be slightly different depending on which session closes are used.

My emphasis for intra day trading is all under 1 hour charts - but I still check my 2 / 3 /4 /6 /8 hrs and daily etc at key times for the "bigger picture" overview.

It then really depends how experienced you are and how accurate you want to be.

For example Janos ( who I hope is with us again soon) took it to the "nth" degree and was after stops under 3 pips for average short term trades of 9- 16 pips. So RR's of 3 to 5 - multi times a day. To be that accurate you have to be really good but even on just a 70% accuracy level - that meant he could look on say 10 trades a day on 2% stakes results of 30-50% growth a day -

Amazing but possible - ( I prefer 5-8 pip stops as long as spreads are under 2pips)

To do that type of trading requires total focus and lots and lost of real time experience - and using basically tick charts and multi frames.

For more normal daily trading - ie 15-30 pip stops and 30-70 pip trades - you can quite easily work of only 2-4 charts. You are not going to get so many 70 pip trades in a day - so you limit yourself and ideally you dont want your stop over 25 pips - but you can use 30 min plus charts.

Remember every chart can give you a different view - as all are in the past and are lagging.

Matching them up is a skill - like doing a complicated jigsaw and still does not guarantee price will move that way. However I am sure you would be very happy with 70% + accuracy and good MM to make you money - and so you have to learn to lose - but controlled losses - with you in charge all the while.

If you are day trading - I dont suggest you try 20+ trades a day - but don't just do 2 or 3 a day - it will take you ages to get 500+ trades under your belt - and the more trades you take the more your learn about your system - your MM and of course - you

Have a nice weekend

Regards

Peter

Comment by Splithand on July 6, 2012 at 6:26pm: For real setup your trade and trade your setup in agreement with one another yes i agree with Peter Know Your System and trade what you see not what you THINK you see but what you SEE is in fact right in front of you try this take a demo account and try to blow it up be diligent in your efforts blow up 3 demo accounts useing your system your tools of choice and you will soon see what it is i am trying to say peace be the journey :

Your Friend <Split>>>

Comment by Jim Mathis on July 6, 2012 at 10:37pm: Gill Days like today is when experience counts. As we see more experienced traders decisively wading into what many see as chaos and make huge gains or in some instances terminate massive trades that covered many days.

How does one gain experience, only by doing.

Take heart, do not be discouraged.

Although mere mortals like you and I can not trade at that level, YET,

there are some things we can do to improve ourselves.

We can study and observe, pick our spots with care and grow at our own pace.

There is no shame in not trading just because the market is on if a high probability position can not be seen by you.

You know what your pace is and capacity for learning use that as your gauge.

All that matters is that you grow as a trader not the results of others.

Find what makes sense to you, use that. Ascertain what your strengths are, build on them.

As time goes by you will learn more and more, confidence comes.

Find what makes you confident to enter and build on that.

This is not a less than greater than situation, all that matters is your own development.

At some point in time all traders were once where you are now, or where I am now

In answer to your question, below are some links that may be helpful to you.

Cheers

Do not be put off by the name.

http://www.babypips.com/school/multiple-time-frame-analysis.html

http://www.babypips.com/school/chart-patterns-schmatterns.html

http://www.babypips.com/school/

Employ your time in improving yourself by other men's writings so that you shall come easily by what others have labored hard for.

- Socrates

One must learn by doing the thing, for though you think you know it, you have no certainty until you try.

- Aristotle

Comment by Gill on July 7, 2012 at 2:14am: Thank you all for your replies and you time to answer.

Lisa rule of 3 sounds good + shamrock (for irish luck) - i had 1hr, 4hr, daily and weekly open on 1 mt4 window... rule of 4? but maybe use 4hr, daily and weekly to get the picture Peter and hourly to enter... Getting the big picture yes.. it often looks very different from one TF to another... ''over analyse'' yes Peter and keepin it simple... hard to combine... that's the whole question really... but I like the big picture idea... and overall yes I see what you are all saying... experience... best answer will be found in trial and error ...

Thanks for the links Jim - I have clicked them all open now so as not to put on the long finger (mine is ultra long) and I also like the Socrates and Aristotle quotes

Experience patience and education

Split... I like the blowin up demo a/cs idea... but i'd be afraid i'd get too experienced in it lol... I know you probably have a secret method to your madness... (what is it?)

THE BIG PICTURE

Comment by Peter jcp on July 7, 2012 at 8:38am: Morning Gill - OK - next stages to think of if you plan to use 3 or 4 time frames to trade off.

I am pleased you have used the Aussie as and example as its been relevant this week in the forum

You have probably heard of "top down analysis" - which in this case would mean - build up your picture from the weekly chart down to the 1 hr..

Look at "jigsaw puzzle and count your pieces - ie weekly as 7 days - but only 5 count as daily candles. In each daily you will have 6 x 4 hr candles and 24 x 1hr candles. Normally you only need to look at your weekly and daily charts - once or twice a day - your 4 hr charts more often and your 1 hr charts most often for changes in price or direction.

The big picture view is that the AU is in a approx 1500 pip range last year or so and during the last 4-5 weeks it as been in an up trend from a low. This up trend as so far had risen approx 700 pips – a big rise.

For the last 5 weeks check the sizes of the pullbacks and the sizes of all the different 4 candle frames and work out the averages and decide what you might be after in terms of a trade.

Check out all the S & R’s and with you having a cloud on there as an indicator – check the relevant areas on each time frame etc etc.

Then the big question – whats going to happen next ?

Will it just pull back another 20 pips and then next week continue up with more weekly highs?

Will the weekly from this last week become a great reversal candle and we drop a further 1-300 pips?

Will we range for next week in a 150 pip area ??

Remember – the smaller frames always show price change first – but they have not got the strength of the big frames and so is it just “noise” or it it the start of a change then confirmed by each of your frames

For now if the 1hr and the 4 hr say down – then the daily goes into down – we could get a reversal.

Alternatively if the one hr fizzles out goes back into buy and then the 4 hr daily and weekly are still bullish – it might mean further up with more daily and weekly highs.

Try not to have any “bias view”. Ie – keep an open mind and go with the flows you chose or prefer – ie are you after 20 pips – 70 pips – 200 pips + trades – with the relevant size stops and risk?

Don’t worry about being wrong – discuss with others what you are seeing and anticipating and as you get more experienced and fine tune your charts – you will then have faith in them and know – most of the time your decisions will be correct.

Good Luck

Peter

Comment by Keith Shaw on July 7, 2012 at 1:00pm: Hi Gill,

Please find some references below regarding your query 'one time frame or multiple '

You may find the below recordings extremely useful, they are all by former presenters of the FxStreet Conference (ITC) that Lisa recently attended.

SAM SEIDEN: Multiple Time Frame Analysis (FX Street Recording) : Link Here

AndreiPehar: Finding Your Entry-Trend Following

James Chen: Multiple Time Frame Trading (FX Street Recordig) Link Here

James Chen: Multiple Time Frame Trading In The Forex Market

Dr Alexander Elder in his book Trading For A Living, I think wrote about and outlined a method for using multiple time frames, he called it the Triple Screen Method. The book was first published in 1993, it's be a while since I read it. I do believe a lot of folk picked up on the idea of Mutiple Time Frames from Dr. Elder.

NB: The above is just reference material, not to be blindly followed but just to generate a few ideas that you can make your own. There are a couple of extremely successful traders I know that do not believe in the whole concept of Multiple Time Frames and feel Dr Elders work just helped confuse alot of traders. They look specifically at market structure and frequency on a particular time frame, if they find a good READ on that time frame, that is the time frame they will map and frame a trade around.

When you here presenters and market technicians[sounds better than forex gurus :) ] talk about Multiple Time Frames you may also hear them talk about the Fractal nature of price. This became a bit of a buzz word a while back. Don't want to bog you down, but SHOUT if you want more info on this.

Regarding your other query on how to tell if a pair is retracing or reversing and your best answer (which made me chuckle) [The best answer I took was ‘’when it retraces too far and doesn’t stop, it’s a reversal’’] .

Obviously there is no holy grail, [some scalpers believe there are many holy grails and they have found one, just kidding Peter :-) ] but if you are able to map out market structure on your charts, i.e. swing highs, swing lows, HH's HL's, LH's LL's and are able to understand and take in the idea of impulsive and corrective moves from a Price Action perspective and use a few other SIMPLE tools , you can to some extent form a technical bias to help you figure out if a pair is reversing, consolidating, resuming trend etc and use this info to assist you in your trading decision. Again don't want to bog you down, but SHOUT if you want more info on this part.

A final note: regardless of what Peter and Lisa say, never ever rely on good luck and three clover charms for your trading *wink* . Perhaps this is an interesting topic to be discussed on Lisa's radio show :)

Kind Regards,

Keith.

Comment by Peter jcp on July 7, 2012 at 2:39pm: It's a four leaf clover you need for good luck I believe ;-). Yes agree with Keith although we joke about tossing our lucky coin and using a "fridge magnet" for trade decisions - my luck is based on the following as once quoted by the great Arnold Palmer - the world famous golfer -

Its a funny thing - the more I practice - the luckier I get ;-)

Comment by Keith Shaw on July 7, 2012 at 5:12pm: All good stuff :0)) , first it was the Lexicon now the Leprechaun like it Gissa ;0)) . Peter three is a fibonacci number four isn't ;0) , that is a great quote, the problem is that in this business people are far to busy practicing the wrong skills and on occasion getting lucky, as insane as that may sound.

"Insanity is doing the same thing, over and over again,but expecting different results."

Hope y'all having a great weekend.

Keith