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Disclaimer: I am a novice trader, so if my answer is confusing then please ignore.
Which timeframe to use depends on the setup you have.
i had a setup which led me to trade around 30+ trades in a day. I was not able to journal it, analyse and improve. The only option was to move to a higher timeframe to generate lesser signals. My aim was to get to a level of 5-6 trades max. in a day.
But once the signal is available in the higher timeframe, the stop loss (support) for the trade would be to large to enter, manage - so naturally difficult to take a trade. So I had to keep a really small timeframe to perfect entries that would keep the stop loss really small.
So in essence,
- a higher timeframe based on # of signals you want from your system/setup.
- a smaller timeframe for entries.
- Exit is again signal from higher timeframe and exiting the position is based on smaller timeframe; sometimes it is fixed at a price point so set the levels and I don't actively manage the trade.
Bringing volume profile (daily) into the setup, provides context and helps to arrive at a higher timeframe that is comfortable to my emotions.
It appears that you are coming to your own conclusions regarding how you want to trade and how you propose to glean movement from the price action along with the size of your contracts.
Are you still in lockdown, down under in Melbourne?
Oh wait, I forgot there is a Melbourne down in Florida too?
1. Desired time you want to be in the market.
2. Instrument you are trading
3. Size of leverage you are using/risk tolerance
4. Quality of your entries.
5. What kind of profits you are after.
My preference?
MNQ:
1. 1-5 minutes for range day. Longer for extension days.
2. 5 minute chart/20 second for entries. Some use 5 range bars for entries.
3. 2 longer term charts for easy viewing.
Not for everyone, but I take no overnight positions.
This is just one of a thousand methods.
Everyone is right in their own eyes. If it works, great. If not, figure it out.
2. Treasury futures. Primarily, the Ultra Bond (/UB)
3. I scale into my positions, because I am a contrarian. I start off with one lot once price is 1SD from the mean. I add two lots once price reaches 2SD. If price reaches 3SD, I will assess the situation and either add more, or sit on my hands. I can tolerate up to 10 lots. However, I would never put on 10 lots as an opening position.
4. Entries are getting better. It's just a matter of gaining more experience, staying disciplined by sticking to the plan (i.e., do not enter any position if price isn't 1SD (or greater from the mean).
5. Profits that will enable me to retire from my job, which would be five digit profits every 5 to 10 trading days. Presently, my profits range from high three digits to mid five digits.
The characteristics of any given trading day are largely defined by the activity (or lack thereof) of institutions in the marketplace. For example: ES doesn't have a trend day because a bunch of retail traders trading 2 lots in MES pile in on one side. Instead, a trend day occurs because there is a fundamental imbalance between buyers and sellers, frequently created by new information entering the marketplace. That could be A fed meeting, employment report, or earnings from major components of a given index. Volume (institutional activity) equates to range. There is an extremely high correlation.
What does this have to do with the OP's question about what timeframe to use? A lot.
If you have had several narrow range sessions leading up to a report or whatever - eventually a breakout will occur, right? If you are trading continuation patterns following the initial influx of institutional order flow the timeframes flow sequentially. Literally a 15 second flag, followed by the 1 minute, then a 5 min pullback, etc... The same holds true for initial divergence patterns, etc...
So, trade the timeframe appropriate for the current context. Waiting for an hourly bar to 'confirm' a breakout (or whatever setup) is adding unnecessary risk to your trade. There literally are trades (they don't happen that frequently) where a trader can jump on a move using a tiny timeframe setup and capture the vast majority of a session's range. This is the essence of successful trading. Earn several multiples of your initial risk with little to no adverse excursion. (MAE as they call it)
So, get the main idea or big picture right, then zoom in to enter the trade and manage risk. Your best trades will go in your favor very quickly - both in terms of price and time.
