My experience with tick based charts and strategies on them are mixed. They can be profitable of course but the variation of the drawdown can far exceed the slightly better reward-risk-ratio I can get from trading those smaller timeframes. What kind of timeframe you like and why (perhaps) ? Pros and cons of smaller/higher timeframes for you ? What is your experience here (both discretionary and systematic traders are welcomed to answer or share opinions) ?
i use range bars - they have their faults but i have learned how to live with the shortcomings. i would guess the losers last four seconds and the winners occur in the same second. i love being out of the market most of the time while i use to be in the market all the time.
This question has been asked a million times. Talk about day trading. Your mind has to be agile. Sometimes you use one minute chart. Sometimes one hour chart. Likewise for those who use volume based chart. Look at the market condition then decide accordingly.
Get yourself "up to speed" on Price TA. You'll know the answer and won't need to bother asking. One hint however... tic charts are too manic, IMV.
Implement multi-TF analysis. Start with HTF then drill-down to LTF. Your bias is aligned with the larger trend and you can calibrate to have tighter stops and thus smaller drawdowns for entries. Your targets are still with the areas on the HTF you've identified. For some it's a one-size fits all, but in reality that introduces reduced signal strength.
So these HTF limits down the trades or the direction of the trades. How far do you go here ? What is the highest HTF here ? What if your weekly and daily HTF contradicts, then no trade ?
I have a 1500-volume chart on ES which is my fast chart and execution chart. It gives me a good view of what's going on at all times, but I can agree with what @Scataphagos is saying: They can be "manic" or "noisy". I do think it can help me with execution at times, though. For most of my trading decisions I'm looking at levels (where many are timeframe independent) or larger time frames. Main time frame for day trading is the 5-minute. Used to look more at the 1-minute, but mostly on the 5 these days. 30 and 60 and above for the big picture.
1) Yes, the limits keep you with the higher TF bias, therefore increases your probability. 2) To start you can use any 3 TF frameworks. The concept is what you want to focus upon, not the exact TFs. If weekly trades -> H12, H8, H4 If daily trades -> H1, m30, m15 or D1, H4, m30, then drill down into m5-m1 looking for tighter entries. Again it's the concept, not a rigid framework. One can drill down to sub-minute is you are that ADHD. 3) If you are trading HTFs, then monthly charts should be included. Focus on where the PWL/PWH's and PDL/PDH's are and annotate these levels on your chart. Also including the significant TF open. eg. To form my weekly bias, I'd look at Daily's, their relevant levels and the open of the previous week and the upcoming week. 4) Depends on your skill level. Contra-trend trading is more advanced. If the dominant trend is evident on the weekly as a short, then the contra-trend bullish daily are where to look for short entries. Since you are looking at the weekly, those days that comprise it can be divided into bullish and bearish moves of the weekly candle. Knowing where your weekly open is then gives you an idea of where the daily is seeking liquidity. What beginners do is neglect the HTF bias, see a bullish day forming, go long on a breakout but book a loss when the trade goes against them as the market has a continuation not a change in HTF bias. The only event where this is not the case is for a reversal. It's true that all reversals can be traced to a 5m bar but it's just not that simplistic. PA is fractal, so whatever your frame is, it can translate to other frames.
For any given trade, there's a perfect moment to enter - a point after the signal is established when you can get in and see near-zero drawdown if the trade is to be a winner, or know to get out quickly if it's a loser. Generally these appear as either: 1. A signal cascade where the appearance of a very short timeframe signal can be anticipated to trigger a longer one, which itself can be expected to trigger a still longer one, etc. and/or... 2. Following a signal on some TF, the market pushes against you a fair distance - but not yet enough to trigger the stop, and then it flashes a smaller-timeframe reversal. Being able to identify these systematically is basically the holy grail, as trading successfully is about taking lots of shots, losing little or nothing when wrong, and banking relatively huge winners when you're right. In practice this means that nailing good entries is just about all that matters.