Your barking up the wrong tree, you'll get no egde from funky tfs,13m isnt more predictive than 15 or any other, you've had some good points go back and re read and ask questions on those.. why would you want to avoid the crowd? you need to be with the crowd..just make sure your with the right crowd....
Oh wow... I didn't know you wanted an accelerated course in trading university. My opinion: until you put money on the line, any technique is just a fantasy. Happy sim'ing.
Keep in mind that by day trading the most common time frames used by day traders, you place yourself with the momentum of the crowd. If the majority of day traders are using a 5-min chart for signal bars and entry points and you place a buy stop or sell stop just outside a breakout level, you are placed in the momentum of price movement, which gives you an instantly profitable no-heat trade. If you then use a less-common time frame to help keep you in the trade while others may get shaken out, then I would say the uncommon time frame is of benefit. I doubt an uncommon time frame chart would be helpful for entries. I find that a time frame 1/3 of your trading time frame is very helpful for early entries on a trade. I trade a 5-min chart because it's so technically clean. Why? Because the majority of day traders watch a 5-min chart and day traders trade technically, not fundamentally. I use a 1-min chart to quickly size up micro-trends visually that I wouldn't see until later on the 5-min chart. An example is a failed breakout signaling the end of a trend. My 5-min chart may show price action that appears to be another bar in a strong thrust upward in a bull trend, but I see on the 1-min chart that a previous high broke out by 2 ticks and pulled back, leaving a clear double top formation. I see that and quickly put on a counter-trend position, capturing what may be intended as a 20-tick pullback scalp, yet turn out to be a very nice reversal forming the first leg in a new trend. By getting in early via the 1-min chart, I'm able to patiently sit through the wiggles that occur near extremes without getting shaken out and having to re-enter, which makes my broker happy, but can be frustrating for me.
thanks for the replies..definitely have given me some stuff to think about..which is why we are all here, right certainly mean't no offense to anyone...In Farley's book he talks about how patterns are less and less reliable as more and more traders come to rely on them. In some cases, to the point, that it is more reliable to constantly take the other side of the obvious..In what little time i have been doing this that seems to make sense. ES is chocked full of pattern chaos, yet a more obscure mid-volume stock seems much more behaved and tradable. That is why i wonder about tying to trade away from the crowd. Perhaps i will find my edge more in what i trade versus how i trade..who knows..it's early, and i certainly don't pretend to know all the answers..
Farley focuses on swing trading, though most of the concepts can be applied to smaller time frames. Farley also recommends looking at old trend lines based on larger time frames to pinpoint areas where "the obvious" fails as result of the big money making decisions based on those more obscure trend lines. My friend uses older trend lines to explain what appears to be moves that don't seem to make sense based on the near-term technicals. IMHO, the easy money is made in the first 2 hours because the price action is more predictable and the moves are stronger, so you can be late to the party and still make money. Later in the trading day, the "obvious" tends to fail: A strong trend finally reverses via a failed final breakout; overbought/oversold indicators that worked predictably early in the day lure in those looking to fade a move and use their stop loss orders to fuel a further push in the same direction; a slow drift up or down through the middle of the day suddenly breaks out hard the opposite direction into the close. And so on. That's why good risk management is so important. Just because a pattern sets up ensuing price action that you've seen repeated 30 times before doesn't mean it will repeat this time. If you form a strong opinion based on what happened 30 times before, and refuse to accept the fact that it isn't happening this time, you can wipe out a good portion of your account.
Imo, any chart on intraday time frame is too slow, unless you know the stock back to front already and just use it as a reference for the recent past (what charts are good for really). Remember, on an intraday level, you are going up against traders who trade a stock each and every session, watching tick for tick each print on the bid/ask -- along with all the programs who know what they look for. A chart by itself just isn't good enough over the longer run. Go past the intraday time frame and charts become more trustworthy.
There is no edge in picking "off" time frames. There may be time frames in which a a given instrument is currently behaving in a way that suits your style. If so use it while it works.
"A chart by itself just isn't good enough over the longer run. Go past the intraday time frame and charts become more trustworthy." illiquid..can you clarify a bit? thanks
It's just not enough in the intraday time frame to trade equities purely off charts, the traditional patterns, s&r, etc are all much more prone to noise; of course they are essential in showing where price has been, but for comparison's sake buying a dictionary isn't going to make you the next Hemmingway. The daily time frame on the other hand can still yield results from classic chart reading, but I'm sure it's still much more difficult than say 20 years ago.