take simple strategy buying exactly on support with stop x pts and target y pts. program in computer and run test thru 1mio real data bars varying x & y. computer(s) will sweat couple of days. then compare p/l vs worst drawdown. the best option is where total pl / largest drawdown = MAX. You will probably find there is statistical anomaly at exactly the r/s point. stop 1 point below the resistance and 10 pts target. This is better than 10 pt risk and 10 target. short is better. of course, you need to do hard work, dont believe me. might be lying ...
Excellent question, although I will not answer it as it was posed. Shortening the time frame was a way of managing risk. Managing risk has been a very important factor in trying to trade the volatility that we have seen in the last year or more. I am not sure my performance as measured in the bottom line changed much. As volatility has lessened in the last few weeks, I have started to extend my time on trade gradually, but I am not back to where I was a couple of years ago.
Feel free to describe how the above post doesn't display the ultimate in arrogance using the following descriptions. Arrogant: Having or displaying a sense of overbearing self-worth or self-importance. Marked by or arising from a feeling or assumption of one's superiority toward others. Regarding your poll: Moving from shorter time frames to longer time frames made a considerable difference in my trading for a variety of reasons.
5min NQ charts, simple pullbacks, WITH TREND only. K.I.S.S. wjk wrote""Moving from shorter time frames to longer time frames made a considerable difference in my trading for a variety of reasons."" Yup. Me too.
The way I play is in swing trading you have to look at trends, and do mean reversion. Intraday is trend/countertrend/breakout; mean reversion plays only come up every once in a while. Also, whereas in swing trading I bet on mean reversion when a stock goes to a momentum extreme, intraday I play it on simple exhaustion of a trend getting long in the tooth.
Banks and institutions trade longer time frames for liquidity. Large positions need deep liquidity (often more than can be supplied at any given price level). Hence large accounts scale into and out of, trades. The only way to access that type of liquidity is to trade longer trends, off longer time frames, scaling in progressively, as the market allows significant accumulation only after significant run-ups. That truism then becomes self-reinforcing and exacerbates the trendiness of moves, as all big traders expect larger moves to last, so they keep scaling in and pushing the trend higher or lower. So, to answer the question, yes. Longer time frames = better moves. Most of the time
That's a great explanation achilles28, it explains a lot, is logical and really makes a lot of sense. For the most part I find that working off of longer time frames to provide more consistent results than shorter time frames, but then you run into the "problems" that you just mentioned. The only way I see around it is trade multiple time frames. Of course you will get into the move later, but you trading will be more consistent, and will consistently yield more positive results.