5min chart, 30min chart, 4hr OR Daily chart?........

Gomaz
12
Gomaz  

There seems to be a lot of conjecture as to whether it is better to trade short time frames or longer time frames.

In fact it is often said that unless you can trade the longer time frames then you shouldn’t even contemplate trading the short time frames.

 

Now, I am not sure I entirely agree with this statement. Sure there is certainly a lot of “market noise” in the shorter time frames especially around news announcements and it can more difficult to clearly spot the trend on the shorter time frames. Personally, I do find the 1 minute chart challenging, as I don’t think there is enough data there to make an informed decision. A 5 minute chart is lowest time frame I would use.

 

When you trade the longer time frames, you have a lot more draw down before it heads in the anticipated direction. And yes, the gains will be greater when trading longer time frames, but that waiting and experiencing those drawdowns, momentarily play havoc on your account and can be a little bit stressful, especially for newer traders.

 

And if you are wrong, the stop losses are much greater. I have found that as a rule of thumb most good, “trading systems” systems have on average have a strike rate of about 80% That means that 20% of the time you will lose. On a daily weekly or even a 4 hour chart, OUCH!

One thing that is often over looked on small time frames….(and on the larger time frames well for that matter)…. is the amount of momentum in the actual move.

 

It is the rate of momentum the determines how big the movement is going to be and at what speed it will move.

 

Think of ten pin bowling.

 

Basically, the rate of momentum in which the ball is delivered down the bowling alley determines how successful it will be reaching the ten pins. If you have ever seen a little kid try bowl a bowling ball, most of the time the ball ends up in the side alley long before it reaches the 10 pins. If you use this analogy with forex trading, you want the ball to be delivered with enough momentum, that it will reach the ten pins.

 

But you don’t want to wait until it has actually reached the ten pins before you take some profit, you want to take some out of the middle.

 

If you could determine that a move has sufficient momentum then it becomes a very high probability trade and you are almost guaranteed a profit once it has cleared your spread. By using momentum angles of 4 x1, 2 x 1 and a 1x 1  most of the time you can determine if a movement has sufficient momentum to carry through.

 

What 4 x1, 2 x 1 and a 1x 1  means is: 4 units of price to 1 unit of time, and: 2 units of price to 1 unit of time. And of course the one with the lowest amount of momentum is: 1 unit of price to 1 unit of time.

 

I know this sounds complicated but in reality it isn’t, though it is limiting to explain the concept on a forum post. So if you find this interesting and would like to learn more you can register for a one time only free webinar being done for the  Forex community  on momentum in trading forex at:XXXXXXXXXXXXXXXXXXX

 

Cheers

Simon Gniadkowski
17393
Simon Gniadkowski  
Gomaz:

There seems to be a lot of conjecture as to whether it is better to trade short time frames or longer time frames.

In fact it is often said that unless you can trade the longer time frames then you shouldn’t even contemplate trading the short time frames.

 Now, I am not sure I entirely agree with this statement. Sure there is certainly a lot of “market noise” in the shorter time frames especially around news announcements and it can more difficult to clearly spot the trend on the shorter time frames. Personally, I do find the 1 minute chart challenging, as I don’t think there is enough data there to make an informed decision. A 5 minute chart is lowest time frame I would use.

You have a narrow way of thinking . . .  and also a wrong way of thinking.  Don't think fixed lots positions,  think about fixed risk positions . . .  then the timeframe has no effect on risk and DD.

This discussion is completely off topic for this Forum . . .  so will most likely be deleted . . .  oh,  and by the way . . .

 Perhaps you missed this when you registered . . .

Look here: https://www.mql5.com/en/users/register

It says . . . "4. Posting of advertising messages is forbidden. "

Nathan
1434
Nathan  
Gomaz, I believe a trading strategy must revolve around the broker being used and the spread of the currency pair being traded. If I understand an EA's logic, I can determine if an EA will perform well or poorly on the broker of choice. Developing a "workhorse" bot is a difficult task and takes MUCH sacrifice. Even after a "master ea" is developed, I believe it should be consistently updated and improved for future market potential. A reason I began writing EAs was to make my life less difficult. This is not the case, and is quite the opposite. Coding is a job and labor. Even if I make millions of dollars, this does not mean I am on a beach in Mexico drinking tequila and smoking Cuban cigars. I am probably isolated alone and do not live a normal life. This is the reality of a true coder. I am not a veteran coder and have more to learn, but I believe I understand sacrifices I have made by dedicating time of my life to coding. I do not believe coding is an easy life as it can be regularly assumed. Good luck & thanks for your post.
hughbriss
131
hughbriss  
WhooDoo22:
Gomaz, I believe a trading strategy must revolve around the broker being used and the spread of the currency pair being traded. If I understand an EA's logic, I can determine if an EA will perform well or poorly on the broker of choice. Developing a "workhorse" bot is a difficult task and takes MUCH sacrifice. Even after a "master ea" is developed, I believe it should be consistently updated and improved for future market potential. A reason I began writing EAs was to make my life less difficult. This is not the case, and is quite the opposite. Coding is a job and labor. Even if I make millions of dollars, this does not mean I am on a beach in Mexico drinking tequila and smoking Cuban cigars. I am probably isolated alone and do not live a normal life. This is the reality of a true coder. I am not a veteran coder and have more to learn, but I believe I understand sacrifices I have made by dedicating time of my life to coding. I do not believe coding is an easy life as it can be regularly assumed. Good luck & thanks for your post.


I wouldn't spend too much time worrying about his thoughts and opinions, he was only here to sell something anyway, hence no reply.

I understand your thoughts about the EA route to trading not necessarily making your life any easier but I started coding to build EA's that run my mechanical end of day systems for me automatically and faster than I could do it manually. To that end I have more or less achieved my goal. I turn the pc on at night just before the candle close/open and switch it off just after. This has made my trading life significantly easier. Of course end of day systems with a modest account are not going to get me that mexican beach any faster but I can say that my EA's do what I need them to do for me.