TA - same on different timeframes?

Discussion in 'Technical Analysis' started by elit, Oct 13, 2006.

  1. elit


    Could a system that works for EOD trading also be used in daytrading?

    For example if I have a 20 day MA and a 5 day MA and a cross gives a buy signal.

    Could this also be applied in daytrading, like a 20 hour MA and a 5 hour MA, or a 20 minute MA and a 5 minute MA?

    And also a 20 week MA and a 5 week MA?

    I have never ever tried daytrading, but I have done some initial tests with weekly data and my system also seem to give good signals for weekly data, but slightly worse results. This idicates that the shorter the timeframe, the better the results (That is a generalization). Could this also mean, that my system would give even better results for daytrading? Have any one of you noticed something like this? Of course commissions and slippage plays a much larger role there...

  2. Generaly speaking ,yes. Any sound idea can be transfered to any timeframe. Parameters of your indicators must be adjusted though.
  3. I don't agree.
    MA's can work in big timeframes but will perform much worse in smaller timeframes. MA's need big moves, but moves get smaller when timeframes becomes smaller. Even adjusting the parameters will not change the basis problem.

    Whether an indicator works in all timeframes or not depends most on the speed of reaction of the indicator. The slower the reaction the worse the result in daytrading.

  4. elit


    Ok thanks.

    Any input on wether a system could be more profitable or not in smaller timeframes?
    This would obviously be the result of more trades, of course, and:

    number of trades*profit per trade while daytrading
    would be greater than
    number of trades*profit per trade while position trading.

  5. elit


    I don't understand what the difference is between a MA for 20 days and a MA for 20 hours or a MA for 20 minutes and how there could be a difference in speed as you say.

    Do you mean that intraday price tend to not trend that much and therefore when an MA would start to point upward the price is already on its way down?

    I read somewhere that price tend to trend more in smaller timeframes. This could be complete bogus, like I said I have not any experience in intraday whatsoever. MAs are well suited for trending.
  6. Walther is correct. Every indicator is powerful if you know how to use it. MA's on sub 1-minute timeframes are perhaps more powerful than on daily charts, but don't expect your daily template to work the same for daytrading. Everything will need adjusting and it will take you some considerable time to do that. No one can tell you how to use your set up - it requires hard graft on your part. If you have something that works in any one timeframe it probably has the seeds for success in another timeframe.
  7. Glad to hear they don't work ... god forbid that anyone else would figure out that they do (oops .. I didn't say that).

    <img src="http://www.elitetrader.com/vb/attachment.php?s=&postid=1231300">
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  8. Both from this afternoons action on a very very long timeframe.

    <img src="http://www.elitetrader.com/vb/attachment.php?s=&postid=1231302">
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  9. Joab


    Kiwi I guess you can start your own infomercial now and teach this to the masses.

    It beats Green and Red lights :cool:
  10. Kiwi trader,

    i said that they perform worse in smaller timeframes, i didn't say they don't work at all.
    But i have things that work much better than MA's, and i can show you charts where you get whipsawed so many times in a row that your account is wiped out within hours.
    It is easy to find samples to proof that MA's are the best thing, and it is also easy to find samples to prove that MA's a disastrous.

    MA's lag behind, so you need enough trend to make money. Hourly moves are bigger than 5minute moves so it will be easier to make money in hourly charts than in 5minute charts.
    #10     Oct 13, 2006