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Example of using multiple time frames shown in these images from The Klowne Roome.
Daily and weekly charts should also be kept in mind.
Special thanks to Fat Tails and gomi for pivots and market profile levels used on these charts.
One of …
"If we don't loosen up some money, this sucker is going down." -GW Bush, 2008
“Lack of proof that something is true does not prove that it is not true - when you want to believe.” -Humpty Dumpty, 2014
“The greatest shortcoming of the human race is our inability to understand the exponential function.” Prof. Albert Bartlett
Can you help answer these questions from other members on NexusFi?
what is the bigger trend? following the bigger trend, you should be long since 2009.
but I really believe it depends how you trade. if you're day trading with a goal of 2-3 points per trade, then there's absolutely nothing wrong using a 1 min chart. I personally prefer range charts. it's easier to see what price does at a certain level compared to volume activities.
in my experience, it's one of the best recipes to empty your account, trying to catch meatier moves intra day. especially when adding to a position. a meatier move can end at any time in the middle of nowhere and reverse. I try to stay away in trending days or at least just trade with very small positions. it's just not worth the risk.
but again, it really depends how you trade, including what signals you're looking at.
I echo what some have already said
- higher time frames decrease the effects of slippage and commission, which kill trading lower time frames
- higher time frames minimize the effects of news and market noise, take advantage or larger overall trends
The disadvantages of higher time frames are
- you get fewer trade signals
- you don't satisfy the need to "work" several hours a day in order to feel you are being productive, only have to check charts every now and then.
The last one is actually an advantage, but if you can't get beyond the need to feel productive vis-a-vis hours a day of "actual" labor then it is a disadvantage.
Many people mitigate the first disadvantage by trading many markets at a time, not just one, and using multiple strategies across all markets, preferably uncorrelated.
The way I got to trading higher time frames was that my systems testing took me there. It's just too hard to trade systems on shorter time frames and it's too hard to test these systems since slippage is so much of an issue at the lower levels.
I'm not saying one can't profitably trade lower time frames, it's just a lot harder, so there's no need to make it harder than it already is AFAIC
