Is the larger time frame overrated?

Is the larger time frame overrated? Most gurus will say stick with the higher time frame because it's more reliable.. Me personally, I dont see anything wrong with the small or large time frame. I see the same patterns on all of them..

So what do you guys think?

 

Since it took me awhile to learn that the trend is my friend. I always go with the trend on a 5 or 10 minute chart...but get my entries on a 2m chart.

what might look like a change of trend on a 2 or 1m chart, might actually be a 5m chart retracing. lol when I first started I was wondering why I was losing 80% of my trades as soon as I entered. now I still lose 50% and but i will take it.

 

Freely traded financial markets like the Stock or the Forex markets are fractal in nature: what happens on the bigger time frames also happens on the smaller time frames.

Look at this magnificent image, it has been created by a computer with complex mathematical formulas, it is a fractal image. In other words, the same exact pattern is repeated over and over again, at higher and higher levels, just like in the financial markets.

(google for "fractal images" to see more)

 

Op,

For daytraders, yes.

 

Hi Trader.Fighter,

Quite frankly, I do not see the need to liquidate a trade at the end of the "day" anymore, as most markets (including the all mighty Forex market) now trade 24h a day.

 

Ya I get it, but the most volatile, stocks, are not 24hr.

 

It's not a smaller time frame v larger time frame, it's smaller moves versus bigger moves.

Aim for the bigger moves, your costs as a percentage go down. For example, say you have 1 tick in expenses on any trade. Aiming for a 100 tick move means 1% in cost, aiming for 20 ticks means 5%.

Typically, bigger moves happen on larger time frames. Not always.

 

Sure, but don't be fooled by the apparent volatility of stocks, because dollar for dollar, the Forex market is the most "volatile" market of them all: you only need a 1% move to make 100% profit on your margin money (assuming a 100:1 broker leverage).

Try to do that with stocks, it's impossible.

 

Bigger timeframes, bigger stops, less frequency.

 

If you have a profitable trading system, it is in your best interest to apply it to the smallest time frame possible, you will make more, much more money in the long run.

Personally I am constantly looking for mini-trends on the 15 min charts.

True.

But while you are waiting for the "big" move, the short-term trader can make 5 times 50 pip profit in 2 days (250 pips), while you wait 3 weeks to make that same amount.