That is simply not true, a 5-min chart is more random than a daily, weekly or monthly chart. For instance a support level on a monthly chart is much, MUCH more meaningful than a support line on the 1 min chart, simply because the total amount of money committed to the monthly chart, at that support level, is at least 1000 times bigger. The smaller the time frame, the bigger the noise, not to mention the negative impact of high frequency trading. PS: That does not mean we cannot make money on the 1 or 5 min charts, far from it.
"Oh Volpri!". You mean well, put a lot of effort to your posts but to no avail. LOL. 99.9% of the world's population find it impossible to profit from trading the equities markets. Doctors, lawyers, scientists, mathmaticians, engineers all predominantly fail to get rich from trading. Buffett lately is struggling. Fund managers and hedge funds largely underperform the index. Algos frequently fail big time. HFT is a decreasing business. And you attempt to justify this statement??? LMAO I'm not saying you cannot make money, I'm not saying markets are 100% random.
One way of looking at this is that there is a lot of confusion about direction on short time frames. What some people call 'noise' is actually indicative of aggressive trading. This can be an opportunity. If you learn what the professionals are doing, then you can get a big advantage on the shortest time frame. There are so many algo's executing with contingent orders trying to get positions on, while other traders are trying to force them to trade out of those positions. Much of the trading is designed to try and induce executions in order to take advantage of the resulting movement in price differentials. A lot of the HFT is trading baskets, index spreads, sector spreads, momentum rank, and similar, and they are feeding on this volatility. If you can figure out what HFT is doing, then you can get way ahead of this stuff. Most of HFT is trading the basis spread and cash vs etf, synthetic index vs etf, synthetic index vs futures, etf vs etf, and stock vs stock basket, etc. Those trades benefit from trending markets that swing up and down over and over and over because it creates opportunity to trade the spreads. Understanding HFT is so important it's not even funny. Most people think HFT is just about order queue, contingent orders, special order types, and so on. But the truth is that so much of HFT is doing the stuff I talked about, especially the basis trade (spot vs future). The basis trade is so heavy that it's become the most important thing in the market for ES trading, especially once the vix gets into the teens...
Unfortunately HFT algos are trade secrets and, in my opinion, have been designed for the sole purpose of taking money from the public, one penny at a time. Read "Dark Pools: High-Speed Traders, AI Bandits, and the Threat to the Global Financial System" or "Dark Pools: The Rise of the Machine Traders and the Rigging of the U.S. Stock Market" for example to get an idea of the problem. The idea that HFT algos provide "liquidity" to the market and serve a useful purpose to the trading community is total bullshit.
HFT algos provides liquidity because it trades big size per trade and frequently. That is how companies that run HFT algos able to absorb the operation cost (low commission, infrastructure, staff, etc) assuming that they will make profit in the long run.
Sure, it's called fake liquidity, as orders are quickly sent and then cancelled in nanoseconds. They are essentially front running trades between buyers and sellers. In fact HFT algos are not taking on opposite positions to counterparties wishing to trade (like market-makers do), they are not taking any position at all, period.
@themickey "Oh Volpri! You mean well, put a lot of effort to your posts but to no avail. LOL. 99.9% of the world's population find it impossible to profit from trading the equities markets. Doctors, lawyers, scientists, mathmaticians, engineers all predominantly fail to get rich from trading. Buffett lately is struggling. Fund managers and hedge funds largely underperform the index. Algos frequently fail big time. HFT is a decreasing business. And you attempt to justify this statement???" *Oh Mickey; I almost forgot about Mickey Mouse!!! Algos are doing well, which explains why DIS, and UBER, went up considerably (squeezing shorts), in quarters, which historically should have been their worst. Fundamental Analysis is DEAD, and my Bsc. in Economics from Duke University is now worthless, and I accept that. As for HFT, see how Citadel is doing... Buffet is simply looking for deals that benefit him, at the cost of others. A shark, whose time is now done. And he has amazing PR. Google his last "successor", who was fired for insider trading. Very far in the Google search. He has dissappeared! Mathematicians have gotten wildly rich from trading. Google Jim Simons (Medallion Fund), and I highly recommend reading "A Man for All Markets", by Edward O. Thorp. He initially discovered the formula for pricing warrants, then options, which Fischer Black and Myron Scholes later confirmed after being inspired by reading "Beat the Dealer", and "Beat the Market" by Thorp. They went onto win a Nobel Prize (which should have gone to Thorp!!!). READ, MICKEY MOUSE!!! And use a Dictionary, as my intuition tells me your vocabulary is on the lesser side?
@themickey And Thorp was Griffin's mentor, showing him everything about his convertible bond strategy, back in 1990!!! There would be no Citadel, or Nobel Prize, for Black-Scholes without EDWARD O. THORP. Read, you dumb Mickey Mouse!!! https://www.citadel.com/leadership/kenneth-c-griffin/