I was wondering if anybody could give me some advice on tick charts for currency futures. I currently trade the euro fx and british pound during early morning hours and have recently started looking at tick charts for those markets. I find the chart patterns to be a lot more reliable on the tick charts compared to say a 5 or 10 min chart. The problem is I don't know what settings are the best when dealing with tick charts. I currently am looking at an 89 and 133 because one person told me that these are pretty standard charts to look at. The patterns are absolutely beautiful on them but the difference between the 89 and 133 is very very very small. So im wondering if I even need to look at both of them or if I should replace one of them for another. Can anybody give me some advice on what are the best tick charts to use in their experience? There is just such a selection that I don't even know where to start. I have heard 55, 89, 133, 244, etc. Also what oscilators do you use with them if any? I would imagine that stochastics would be the best (any particular setting you find works well on the stochastic?). Sorry for all the questions but I am a position trader as a rule and have only been trading intra day for a short time. So any advice to an intra day newbie is much appreciated. Thanks in advance!!!
It is a good question, but sort of like asking what ingredients you should use to cook a meal. The first thing to do is decide what kind of trading you want to do-- timeframe and methodology. Once you do that, you will be able to pick out a timeframe that suits you.
In MY opinion the true "gold standards" of time frames would be daily, weekly and monthly. Again in MY opinion, any subdivision of daily or intra day "time" frames (including tick, volume, range, PnF and minute) is completely arbitrary. There are of course some intra day time frames that are more widely used than others. 5, 15, 30 and 60 minutes are always popular but hardly "universal". In fact my guess is they are simply a carry over from days gone by when charting software didn't offer the wide range of possibilities they do today. PERSONALLY I see no advantage to using a tick chart based on fib numbers as was suggested to you. Nothing "wrong" with them, just no advantage. You pointed out yourself the tiny difference between two tick charts your trying to decide between. If there is little or no difference then I would definitely not clutter up my screen with both. At the end of the day you'll have to decide how often your interested in trading and experiment/choose a "time" frame accordingly. In my opinion there is no "best" intra day time/vol/tick or range setting to use. The best is what fits you and your particular style of trading.
There is no right tick chart to use. It all boils down to one you feel gives you the best trades for your style. I prefer a 34 tick chart on the Euro FX. This chart to me provides some very nice swings. I use fibs to trade the swings for my entries and also use a 10ema as a trailing stop - price closes above/below, I close out. Since your basing your tick charts on fibs as I do, it would actually be a 144 and 233 tick chart. I also like the look of the 233 tick chart. I believe it looks much like a 15min chart. (I'm not at my charts now so I may be mistaken there). Determine what your objective is (5pips, 10pips, etc) and then use a chart that offers you the best opp to capture those moves. The only way to figure that out is to sit down and and look through them all.
The main advantage with using 2 time frames of "relative prime" is that the 2 data series are sampling the data with minimal overlap. That gives you better confirmation signals. This concept applies to minute series too.
Thanks for the advice everyone. Im actually only in high school so I can only trade currencies (euro fx, pound, canadian) between 3am-7:30am. So im always looking for enough trades to make it worth my while. Can anybody just give me a few starters to look at or maybe some common starting points for which kind of trader uses what (such as 233 for medium day traders, 355 for longer term day traders, 89 for shorter term day traders, etc). Thanks Again guys!