I have been paper trading for awhile now, and was wondering if there is any edge in the primary timeframe one would use for discretionary day-trading. I typically look at the 5 min chart as the primary view, but was wondering if a more obscure time-frame, such as 7 min. would provide any edge at all.. I will probably just try it and see, but was curious if others have been down this road..thanks..
Depends what you're trading, and your overall strategy. Each instrument(whether its a stock, option, currency, etc) has its own price action behavior "sweetspot"..... in other words, some trend better in certain time frames. Also, you haven't said whether you are concentrating on scalping, short term, long term, etc. For example, I trade the ES, sometimes I use the 30 min time frame for a look at the overall picture and 10 min for entry/exit. Other times I use the 15 min for over all, and 5 or 6 min for entry/exit. Plus I use moving avgs. and MACD . So like I said, it all depends on what you are trading, and your overall plan. Then you go in "surgically" (if thats the right word) to pinpoint its sweetspot, and go from there....
the shorter the time you hold (or else, the average profits you seek), the higher that fixed trading costs (commission, slippage, etc.) affect your results.
I dont think he was really asking about the costs. He is more interested in finding an optimum timeframe for whatever hes trading. But he doesnt say what hes trading, or what gen method(if any) hes following. Not much we can do for him at this point..
I am mostly trading a few individual stocks, occasionally ES, but mostly just a couple of stocks. My trading is discretionary and pretty basic. Support, resistance, a few other patterns, and rigid risk control. I'm not scalping. In fact, i prefer to catch major intra-day moves. My other job is in geophysics, so i am acutely aware of the effect of sample rate in regards to analog signal. All that being said, for the trading i do, bars in the 5-15 min timeframe, for the most part effectively sample the stocks i trade. Of course, the optimal sample rate changes every day, so i think it would counter-productive to constantly be chasing a new primary sample rate, for me, at least. I also shift up and down the timeframe curve for perspective and to fine tune entry. But i am referring to the primary chart. So what i am mostly curious about, is whether these more obscure rates, say 6 min., generate more predictive patterns than the much more commonly used 5 min. rate. I suspect it might, just because the majority are useing the 5 mi. rate...that's all.. Thanks for the thoughts..
IMO: If you day trade, 5-min and 15-min would be good to identify the trend/range and good support/resistance zones. And 1-min and tick charts would be good to see the details of the runs/chops - good for timing your entries. It is better to view the same price series in different time-frames.
come on guys..let's get past trading 101 The question is this. Are uncommon timeframes more predictive than common time frames? That is, is a 6 min. candle more predictive than a 5 min. candle? Is a 13 min. candle more predictive than a 15 min candle? If 85% of discretionary traders are useing common time-frames, does it give you any kind of edge to slide your timeframe a little, to avoid the crowd? Most of the platforms i have been looking at don't even allow customizing the time frame beyond the common timeframes, but some of them do, like quotetracker.
It may be possible for you to reason through getting the advantage by shifting time frames somewhat. Unfortunately, you are thinking about a topic that is not fruitful (predicting). If you were to get your mind to think in terms of advantage over others, then you would think in terms of having information before others have information. You may know that trading is based on making the most of an opportunity. If you succeeding getting to considering the nature of how to profit more fully from opportunities common to all, then, perhaps you may begin to listen to input you are being given that addresses where you are and how to get to a better place. A lot of traders are aware of the order of events that instruments follow as they cycle along. This is known and not predicted. Keeping track of one's next four profit segments is a common practice. When a person is doing this he is more or less focussed on taking the full profits of each upcoming segment. This is timing 101, as we all know. It is the simple process of carving each turn as it arrives and departs. Anticipation replaces predicting in timing 101. I hope you get there soon. The pragmatic answer to having the information sooner is to slightly shorten the time frame. The trading fractal is the same but on turning points you can see the 10 to 12 leading indicators sooner.