Chart Reading - Timeframe

Discussion in 'Technical Analysis' started by tanv, Apr 5, 2020.

  1. tanv


    Question is about reading chart -
    While checking on various indicators (BB, Fibo, RSI, MACD and Volume), do I need to apply timeframe in reverse chronological order i.e. Starting from Month, Week, Day, 4 hours etc? I saw various posts but not sure about the order.
  2. Sekiyo


    What’s your own thoughts ?
    Last edited: Apr 5, 2020
    They likes this.
  3. schizo


    Yes. Even though you are day trading, you need to know important areas of support/resistance and trendlines.

    BTW if you really want to succeed as a chart trader, learn pure price action. No BB, RSI, MACD or volume. Just a clean chart with only bar or candle.
    KCalhoun and Sekiyo like this.
  4. KCalhoun

    KCalhoun Sponsor

    Exactly. Price action is all anyone needs

    Length of trend
    Candle heights
    Ohlc sr levels etc
  5. trdes


    I don't fully understand why you say that. For some people indiciator's can drastically help, others can do better without them. It's all the same information just being filtered and viewed in a different way and indicators can also help you identify divergences.

    For example depending on how advanced your indicators are / programming skills are - you can program them to help you see candle / PA patterns into a visual form that will allow you to be able to pick up on the pattern, where as for some of us if all you had was a blank chart you may miss the pattern entirely or not recognize it fast enough to take advantage of it.

    Another example is if there's a pattern you recognize, but another certain pattern hasn't preceded it in "X" amount of bars, than that same pattern can be a lot weaker and your expectations should be dialed down when taking that pattern. That's a lot for a human brain to keep up with. I am sure some people can after years and years of experience. But without indicators I would be limited to trading one product and even than I would only be able have enough brain power to know when the base pattern was signaling (I wouldn't have time to calculate if it's happening within "X" amount of bars for the pattern to be weaker or stronger).
  6. KCalhoun

    KCalhoun Sponsor

    Squiggly lines don't mean much, because they're lagging. I'm a former statistician for Ford (1992).

    Variance in real time price action is key
  7. trdes


    Not entirely true. I've heard you talked about momentum before. Previous momentum does effect future momentum . If you're going to argue it doesn't than that should mean all your trades should be done in a very small time frame, which they aren't because you've posted you hold trades for days on end.

    You could even argue price action is lagging. In order for you to buy price action, something has to happen in order for you to see the price action right? I could claim that's a lagging indicator too.

    People with large positions do not just press buy or sell on there entire position. As mentioned before they could potentially price themselves out and show intent too quickly for other to take advantage of. They will portion out there entries and exits in order to get a net weighted average of the position price and sizing they desire and once the supply is sucked up they can then force the market in the direction they are wanting.

    While they are doing this it absolutely creates patterns and divergences that people can pick up on. The "squiggly lines" do indeed suck if you don't use them properly. The "squiggly lines" are still being created by price action and candle bars though.... to claim you can read PA and candles, but that indicators are inherently useless does not make much sense, they are just another way to read the underlining instrument.
  8. trdes


    Here let me give some more examples .

    Length of trend: You're telling me someone can't or hasn't designed an indicator to help you better see length of trend, but that human eyes are always better and always better for individuals in seeing this?

    Candle heights: Again an indicator can be designed to measure candle heights. An example would be the velocity of the candle, can be used to determine algo activity and also can be used to mark potential overbought or oversold levels that will often get retraced under certain circumstances. Let's assume that proper programming is done. Do you really believe human eyes and brain can keep track of this better than a computer?
  9. schizo


    Suppose you lose access to your "indicators". Would you be able to trade then? Likely not. You would freeze up, not knowing what to do. Why would you want to tie yourself up to anything? On the other hand, PA allows you freedom. Freedom to be creative and think out of the box. It doesn't come with canned instruction on how you should interpret or trade. It's all up to you. Over time, it will make you really think. This will greatly help you improve your trading.
    KCalhoun likes this.
  10. KCalhoun

    KCalhoun Sponsor

    Also important are market internals like VIX TRIN and premkt futures etc as well as individual chart patterns. Trade mgmt re scaling and re-entries are most important.

    But yes technicals are useful, I've written a tiny bit about it

    #10     Apr 5, 2020