Hey Traders, JUst wanted to throw out some observations I have seen in my trading lately. A little about me, I have been trading since 1999. Full time from 99-03, then swing trading for years while I had a couple businesses and then again full time from 2007 to now. In the last 3-4 months I have slowly been transitioning my trading methodologies into longer time frames, all above 30minutes charts up to daily. This intiative to focus more on larger time frames started when i swung some APPL in 2009 and made 70-80% returns on the little account with little or no effort. Mind you, my goal is not to trade with little or no effort, but to maximize goals and returns. Now i know, it wont always be as easy as APPL was in 2009 bull market,(or the current appl bull run) but from my observations, my best trades have been from swings and larger time frames. Just a quick research of methodologies from 1/1/2010 to 10/19/2010, my methodology on the NQ using 60 minute time frames traded 35 times and made considerably much more than if I had used a shorter term methodolgy, where I had 615 trades and the returns were much less than the 60minute time frame. Yes, only 10 month data means nothing, but I have seen data like this for years, and i am doing stat work this week and next. I know the common pro-swing trades arguments, are: you dont see Tudor Jones day trading, you dont see mutual fund guys day trading, many pros graduate into larger time frames etc.....but then again there are Jim Simmons,Don MIller,Lescor,Redinkinc,Svenen etc.. types who kill it short term trading. I am not bashing day trading or intraday scalping, ex: 3min-5min time frames, 344 ticks etc.... i have been in that time frame and one of my systems still trades 10min intraday. All i am saying is that after many observations of REAL-TIME trading throughout years, all signals point that i should leave the small time frames and focus exclusively on larger swing or position trades. Some Positive reasons to swing trade larger time frames: 1. Larger win per trade ratio 2. Less trading, less risk 3. can increase size to make the swings very meaningful. 4. Less whipsaws 5. Have time to guage and closely examine nex trigger. 6. Less cost, less slippage, less entries and exits reduces random risk. So my question is how many of you guys and gals have seen the same observations, gathered the same data, have come to the same conclusions.??? Or maybe have different observations. I am open to discussions. ?? BTW, i trade, nq,ym,es, appl, goog, amzn, qqq, spy, etc.. high flyers and the indexes mostly. Curious to see what peoples responses are, I have an idea what the more experienced guys will answer, but curious to there reasons. Good trading, EF
If you asked me to trade a 10-min chart 5 years ago, I'd have said you were nuts because "you'll miss all the action at that slower timeframe." That said, the 10m on the /ES is working well for me and my trading style these days. When I first began trading I wanted tick or 1-3m charts ... I did alright, but it got a bit noisy. Later on, I began using the 5m chart and did even better...not always by p/l per se, but by not trading as frequently and getting more attuned to the market 'feel' during the trading day. I've come to appreciate using a timeframe that's less noisy and gives me time to analyse the markets more clearly and with less urgency. I no longer futz around bout finding "the right" chart interval for each trading day...it also forces me to be more cognisant of the bigger picture. Given the evolution of my own trading methodologies, I am more comfortable using a larger timeframe for most all of my intraday futures trading....of course, the timeframe depends on the contract I'm trading, obviously. But I rarely go below a 5m chart anymore. A bigger timeframe works for me. It may or may not work for others. Each to his/her own, right?
Thats exactly my point. I think as you progressed or moved from a certain viewpoint/timeframe to another i am as well. The 10min-chart is the size i have been using as my main time frame the last 2 years, not and will probably still trade it, but on a much lesser size. I feel as i am progressing gaining more experience trading, i wont to cut out the noise more and more. Would like to be more attuned with the major "moves" in the market, like i guess we all wish to, just depends on our time frame. Like you said, what works for each is best, and what works for each as they progress is important as well. EF
This will make the HERD very unhappy. They've been on 3-5 minute charts since roman times. Move your family away from the Mara under cover of darkness. If you incur their wrath they are liable to stike a terrible bargain with the Evil One and spit up a nasty curse. Just curious, in your trading career thus far, how many actual times have you looked at a daily? .. how many times .. a weekly? and wait, have you ever looked at a quarterly or yearly?
I look at dailys every day, weekly couple times per month. I manage a couple relatives 401k, trade off weekly only. What is your take on larger time frames? , btw, the first part of your reply, I dont play dungeons and dragons so i have now idea what you said.... "magical sword, against Merlin and the Evil one, etc.. hahaha, EF
An example: I am running an ongoing stat and comparison of EURUSD trading signals on two time frames: H4 (4 hours) and daily. In the past 32 weeks, H4 traded 61 times and produced about 9'000 pips, the daily traded 14 times producing about 5'300 pips. Many H4 signals occured at night (US-times), not easy to handle for many and therefore incurring slippage, while the daily signals can easily be followed by people with a day job. Trading daily timeframe I made about 5'000 pips in the past 31 weeks. The max. drawdowns were lower than 200 pips. Felix
Syspool, You bring up another valid reason for swing/position trading. This can actually be done from work as well, Its a way to trade where you dont need to be in front of computer all day. It can be a much more relaxed, less hectic way to trade. Another good reason is adding size, in your example, 5300pips were made by the system, now add size to that, and then add more size, pretty soon. you will be talking about some large P+l gains, with accompanied swings of the p+l as well. Some trader put it this way to me: you are a hunter, you have 1 month to bring in 100lbs of meat. You can run out in the woods, and hunt squirrels, kill 50 of them at 2lbs each, which means you probably made over 70-80 shots and you get 100lbs of meat. Or, you can hunt smart, lay in wait, take a bigger gun, kill two big wild boars, maybe take 4-5 shots and come home with 100lbs of meat. Which one makes more sense??? Ef
If you're trading off Weekly for real-life positions, you are already a winner. I look at Yearly/Q/M/W twice a month mostly for insight esp. to see if something was missed. But trading off the Weekly with occassional use of Daily for timing is the ultimate way to go. It can't be beat. But here at ET anything above 5-min. timeframe is a foreign language - you should teach them the grammar first before conversing, otherwise its akin to talking to autistic kids in a video arcade.
Can't tell you how many times I've heard that analogy put different ways over the years. Truthfully it's a matter of how well equipped/capable your trading platforms are and your time commitment. I've seen systems built where 10 minutes is considered to correspond with a year of trading, with high end everything, surrounding it, to make it succesful. On the other hand I've seen some really good things pop out of tradestation that swing trade pretty vigorously on the back of institutional level money. So it's more a question of if your willing to take your dingy out on the Atlantic and hope that it takes you too where the wild things are ,or if you want to sail on a yacht with a party of others while someone else steers the ship.