Hello, I've been playing around with my chart settings and cannot settle on a good way to decide when I should adjust my settings to a different time frame. I use either tick or volume based charts. Curious how some other traders decide when to change their settings. I have currently been using an ATR on my lower TF. I've experiment with 1000 ATR (too long)and even as low as 10 ATR (too short). Should I look at ATR on higher TFs than my entry trading TF? ATR on the daily chart? Advice on ATR settings or even other ways you decide when to adjust are appreciated. Thank you
Your back testing should be able to tell you. I hope you can program or you end up shooting into the dark trying to find the quail for dinner, hope you don't end up shooting your family.
After you've done your backtesting to determine which time frame to use for your trade method... There's something else just as important that most don't talk about. Its the "chart configuration" on your monitors that too has an impact on your trade results and health (back, neck, eyes). You're going to need to play around with that to determine what's good for your trading especially if you're using a multiple monitor setup. Yet, if you're 100% automated trader...chart configuration does not impact your trading results nor will it impact your health. Poor chart configuration will cause "missed trade signals", "trade errors" and "incorrect price action analysis". wrbtrader
Not as much what time frame to use, but I'm trying to figure out when/how to adjust the time frame. I know what "area" of time frame to trade in, but am more trying to focus on when to adjust it slightly based on recent volatility.
never adjust the time frame. If volatility gets high, adjust risk and targets and minimize time in trade. When I use targets, I’m looking at exiting at a specific area within a price structure. So if that area from entry to exit provides me with 1.5 handles that my target. If it gives me 2.4, that’s my target. But never adjust chart setting. Your eye needs to get used to all market conditions
You don't need to know how to program to do backtesting. It can be manually done but you need access to historical charting/data to be able to do such. Actually, you'll still need access to historical charting/data even if you were using codes to backtest your trade method to determine the appropriate time frame to trade with. That actually crossed my mind but I immediately brushed that thought aside because you didn't mention it in your initial post. I myself change my chart settings and configuration throughout the trading day and for special trading situations. It does make a huge impact on the trading results but I no longer share my chart configurations & monitor setup and settings of the charts anymore due to trolling online. Regardless, people usually do not ask to know "when" to adjust ? Like I mentioned before, its something most just don't talk about. Regardless, I do change chart timeframes & chart configuration as volatility changes in the markets throughout the trading day via templates because the markets are not the same from hour to hour nor is it the same from one trading day to the next trading day. I've also documented such in a private trade journal so that I can use the info at a later date (weeks, months or years later) to help with trading. In fact, I will use different charts of other price actions to help trade the same thing as volatility changes. Doing this was much easier for me than adjusting risk (stops)/rewards (profit targets) as volatility changed. Both works but adjusting my trade management was more difficult in comparison to adjusting my chart time frame & chart configuration on my monitors. Thus, what EsKiller described...it has merit for some and it work well for him but it was a disaster for me. That's one of those "self-learn" things you'll have to do on your own. wrbtrader
I never change time-frames to find a trade entry point or set-up or stop-loss level. I know the set-up I want on the dailies and if it isn't there I just don't want to look at shorter and shorter time-frames to see if I can find it there "in miniature". Always seems like "cheating" to me. I hear traders say they "wanted" to be long some forex pair but couldn't find an entry on the dailies but they found one on the 15min chart and next thing you know they're long. This seems like rigging the game against yourself. I know there are some fine successful traders who look at set-up on a long time-frame and entry on a shorter one but to me its always seemed like voodoo.
I agree with what you are saying, but decreasing TF doesn't necessarily make it out to be actually "in miniature". It could be from a bar range standpoint the same/similar movement but it took different TF's to achieve that same range. Either you have to change your stops/targets or the TFs, imo.