Jump to content

Welcome to the new Traders Laboratory! Please bear with us as we finish the migration over the next few days. If you find any issues, want to leave feedback, get in touch with us, or offer suggestions please post to the Support forum here.

  • Welcome Guests

    Welcome. You are currently viewing the forum as a guest which does not give you access to all the great features at Traders Laboratory such as interacting with members, access to all forums, downloading attachments, and eligibility to win free giveaways. Registration is fast, simple and absolutely free. Create a FREE Traders Laboratory account here.

Dogpile

Daily Charts Are Meaningless...

Recommended Posts

I stopped using daily charts a while back and must say -- its been a really nice adjustment.

 

In a nutshell, daily charts give you a bias that you just shouldn't have.

 

Admittedly, I do use info from the last 2-4 days but for that I do not need a daily chart -- I can use 15, 30, 60 and 120-mins charts just fine to get the pertinent information.

 

I think there is some use in weekly charts -- but daily charts have been rendered meaningless by too many people using them --- just my opinion ---discussion/agreement/disagreement welcome...

 

Set yourself free and don't even look at a daily chart.

Share this post


Link to post
Share on other sites

Dog,

In context of an active day-trading setup, I agree 100%. This was part of the discussion I was having with BlowFish in another thread. I agree with you completely b/c you hit the nail on the head - you could get a bearish 'feel' from the daily, pass on all long trades, and depending on how you trade, those could be very profitable trades.

 

Obviously as a swing trader, the daily/weekly, etc. are incredibly important. But as a day trader (one who does not hold positions overnight), I think the daily, weekly, etc. are useless. And the main reason is that throughout the day, there's plenty of opportunities to go short or long and to eliminate those b/c of a bias you have off the daily does not work for me.

Share this post


Link to post
Share on other sites

Of course for intraday positions they really don't do you much good. But they give you a feel for the market, at least for me. I feel more "in tune" with the market if I know where it's been and where I feel it's going. Of course that doesn't make me biased on where to place my trades, but I like to have a heads up.

Share this post


Link to post
Share on other sites
Of course that doesn't make me biased on where to place my trades, but I like to have a heads up.

 

James,

If you can ignore the daily or weekly feel and still daytrade, I say more power to you. I find that if I see a long or just feel bullish looking at the daily or weekly, I have a much harder time taking shorts intra-day.

Share this post


Link to post
Share on other sites
I stopped using daily charts a while back and must say -- its been a really nice adjustment.

 

In a nutshell, daily charts give you a bias that you just shouldn't have.

 

Admittedly, I do use info from the last 2-4 days but for that I do not need a daily chart -- I can use 15, 30, 60 and 120-mins charts just fine to get the pertinent information.

 

I think there is some use in weekly charts -- but daily charts have been rendered meaningless by too many people using them --- just my opinion ---discussion/agreement/disagreement welcome...

 

Set yourself free and don't even look at a daily chart.

 

Huh? In another thread, you mentioned that you use the Taylor Technique for your daily bias, but you don't use a daily chart? I think a daily chart and Taylor go hand-in-hand. :confused:

 

Personally, I rely on the daily chart for "bigger picture" stuff - to identify balance areas and other key levels that higher timeframe traders/investors may be looking at (especially confluence areas where levels from the daily and intraday charts line up). It's when multiple timeframes come together that you get really dynamic moves. I also examine the weekly and monthly charts, but they aren't as granular as the daily chart.

Share this post


Link to post
Share on other sites

<<I think a daily chart and Taylor go hand-in-hand. >>

 

I actually do use a daily chart for the Taylor stuff --- busted... but taylor bias only uses last few days (generally 4 days) -- and looking at a daily chart is tough not to get some overly bullish or bearish bias that extends back further than 4 days... if you are a short-term trader, it is very easy to get a bias looking at a daily chart which might show the last 60-100+ days of trading -- a time-period that has cost me money over the years -- so I try to just block it out best I can and focus on lining up the last 2-4 days and the intradays...

 

I do see some use in weekly charts actually for bigger picture stuff -- I just think the daily timeframe is the most difficult timeframe of any to make money from looking at... classic MACD & MACD histogram, 3/10 oscillator, ADX, stochastics are all (more than) useless on the daily timeframe, in my view... will often just lead you to a bias that will lead you astray...

Share this post


Link to post
Share on other sites

So it sounds like you don't require much from the daily chart - you only need to determine the Taylor bias off of the last few daily bars. That makes sense to me. However, it's not clear why the weekly charts would help you when the daily charts do not, beyond the last few bars. That is, how do the weekly charts affect your trade decisions? Also, why wouldn't you use the trend in the daily chart to increase your trade size when price moves in that direction in the lower timeframe charts (i.e., the one you trade off)? This doesn't mean that you can't take countertrend trades (scalps) relative to the daily chart though. I hope I don't appear to presumptuous with my questions, I just want to better understand your position on daily/weekly charts. :)

 

EDIT: The trend in the daily chart is also important to the Taylor Technique; for example, if the market is in a trend according to the daily chart, you will often tend to get two buy days or sells days or so instead of one. That is, the swing cycle is shifted.

Share this post


Link to post
Share on other sites

<<why wouldn't you use the trend in the daily chart to increase your trade size when price moves in that direction in the lower timeframe charts (i.e., the one you trade off)? >>

 

I guess what I was trying to say but didn't come out and say was --- I have a slight bias towards fading any trend that develops on a daily chart. I don't believe in sustainable trends on the daily chart -- I believe in choppy daily action...

 

Now, don't get me wrong -- I DO believe in trends on intraday charts so I will take full size for an intraday trade even if it lines up with a daily trend --- having said that I want to fade the daily trend. So effectively, the daily just has no bearing on my trading.

 

<<how do the weekly charts affect your trade decisions? >>

 

they don't currently. But when stepping out to this timeframe -- the indicators seem to want to speak to me. always playing around -- check this one out (buy weekly macd histogram upturn that occurs during traditional seasonal strength for second half rally --- sell Jan 31st):

 

http://bp1.blogger.com/_5h-SWVGx6Ms/RtpeUx72PHI/AAAAAAAAAZs/r0h8QTBaKho/s1600-h/MDY+Seasonal+MACD.bmp

Share this post


Link to post
Share on other sites
<<why wouldn't you use the trend in the daily chart to increase your trade size when price moves in that direction in the lower timeframe charts (i.e., the one you trade off)? >> ..........

 

 

 

Suppose I trade 3 contracts on a trade if it is in tune with the daily chart. That is, for example, the daily trend is up so I trade 3 contracts when going long. On a short signal I only trade 1.

 

1. Subconsciously I have told myself to trust my long signals 3 x's as much as my shorts. Conversely, I have told myself to distrust my short signals in such a way as to trade 1/3 the position.

 

2. If I am 1/3 less confident in my short signals, why am I taking them at all? If I believed it to be a good trade, then it should not be relocated to a lesser position size. Hence I have already added a negative bias to my trading and a self-fulfilling prophecy.

 

3. If you can't trade with the same size on both signals, why trade the lesser one? You are setting up a hierarchy for trade signals. But why trade anything less than the top of the ladder? Need more trades, or more money? TRADE MORE MARKETS. And trade them only in the direction of the trend.

 

This is the problem, form my point of view with using a daily chart to trade smaller timeframe intra-day. If you believe that trend is one of the small edges afforded the retail trader, it makes little sense to go short when the daily trend is clearly up.

 

But we know that an up trend can have down days. It can have down weeks for that matter. It takes away ones ability to make money if he is only trading on the side of the daily trend. Movement is important and that movement can be counter to the larger daily trend and still be tradable.

 

I prefer to keep my trend-frame small: 15 mins. and my trade-frame smaller: 5mins. I can thus trade counter to the larger daily trend, while still acknowledging the power of trends and fractal market structure.

 

As for the daily chart, its use in intra-day trading should be confined to support/resistance levels.

Share this post


Link to post
Share on other sites
Suppose I trade 3 contracts on a trade if it is in tune with the daily chart. That is, for example, the daily trend is up so I trade 3 contracts when going long. On a short signal I only trade 1.

 

1. Subconsciously I have told myself to trust my long signals 3 x's as much as my shorts. Conversely, I have told myself to distrust my short signals in such a way as to trade 1/3 the position.

 

2. If I am 1/3 less confident in my short signals, why am I taking them at all? If I believed it to be a good trade, then it should not be relocated to a lesser position size. Hence I have already added a negative bias to my trading and a self-fulfilling prophecy.

 

3. If you can't trade with the same size on both signals, why trade the lesser one? You are setting up a hierarchy for trade signals. But why trade anything less than the top of the ladder? Need more trades, or more money? TRADE MORE MARKETS. And trade them only in the direction of the trend.

 

This is the problem, form my point of view with using a daily chart to trade smaller timeframe intra-day. If you believe that trend is one of the small edges afforded the retail trader, it makes little sense to go short when the daily trend is clearly up.

 

But we know that an up trend can have down days. It can have down weeks for that matter. It takes away ones ability to make money if he is only trading on the side of the daily trend. Movement is important and that movement can be counter to the larger daily trend and still be tradable.

 

I prefer to keep my trend-frame small: 15 mins. and my trade-frame smaller: 5mins. I can thus trade counter to the larger daily trend, while still acknowledging the power of trends and fractal market structure.

 

As for the daily chart, its use in intra-day trading should be confined to support/resistance levels.

 

Aligning trades using multiple timeframes increases the probability of a trade versus taking a scalp trade that may be based on a single timeframe only. Why would I take a scalp trade or a less probability trade? Because based on research, the scalp trade may still have an edge, but it may not be as high as a trade that is taken with the longer timeframe trend. So I adjust trade size to compensate. For example, I would expect more profits from a trend day down that is with the longer term trend than a trend day down that is against the longer term trend. Anytime trade conditions and a trader's odds improve, whether it is by using multiple timeframes or because of increasing market volatility, for example, I will step up the leverage in my trading. I believe that knowing when to use more leverage is an important skill used by professional traders. It's sort of like doubling down in Blackjack when the odds are more in your favor. During the month of August, I definitely increased my trade size in general because of increased volatility. Increased volatility generates more profitable trades for me so I acted accordingly. I increased trade size within my risk parameters. I'm glad I did because August was my most profitable month this year thus far. I definitely operate from the point of view that most of my profits come from a few trades. How you use the daily charts is dependent on your trade plan, my point was that using the daily chart is usually advantageous, unless you are a scalp trader that only uses order flow. I use the daily charts to determine short-term to intermediate-term market condition and for support/resistance levels. But there are many other ways that it can be used profitably. For example, Dogpile uses the daily charts with the Taylor Technique. To each his own. There is no right or wrong way here. My point was that for most traders, the daily chart should be consulted.

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.


  • Topics

  • Posts

    • HLF Herbalife stock, watch for a bull flag breakout above 9.02 at https://stockconsultant.com/?HLF
    • Date: 1st April 2025.   Will Gold’s Rally Hold Strong as New Trade Tariffs Take Effect Tomorrow?   Gold continues to increase in value for a sixth consecutive day and is trading more than 17% higher in 2025. Amid fear of higher inflation, a recession and the tariffs war escalating investors continue to invest into Gold pushing demand higher. The trade policy from April 2nd onwards continues to be a key factor for the whole market. Can Gold maintain its upward trend? Trade Policy From Tomorrow Onwards Starting as soon as tomorrow, a 25% tariff will be imposed on all passenger cars imported into the United States. While this White House policy is anticipated to negatively affect European industrial performance, it will also lead to higher transportation and maintenance costs for everyday American taxpayers. The negative impact expected on both the EU and US is one of the reasons investors continue to buy Gold. Additionally, last month, President Donald Trump announced reciprocal sanctions against any trade partners that impose import restrictions on US goods. Furthermore, tariffs on products from Canada and the EU could increase even more if they attempt to coordinate a response. Overall, investors continue to worry that new trade barriers will prompt retaliatory measures, particularly from China, the Eurozone, and Japan. Any retaliation is likely to escalate the trade conflict and prompt another reaction from the US. Experts at Goldman Sachs and other investment banks warn that this will lead to rising inflation and unemployment. They also caution that it could effectively halt economic growth in the US.   XAUUSD 1-Hour Chart   The Weakness In The US Dollar Another factor which is allowing the price of XAUUSD to increase in value is the US Dollar which has been unable to maintain any bullish momentum. Despite last week’s Core PCE Price Index rising to its highest level since February 2024, the US Dollar has been unable to see any significant rise in value. Due to the US Dollar and Gold's inverse correlation, the price of Gold is benefiting from the Dollar weakness. Investors worry that new trade barriers will prompt retaliatory measures from China, the Eurozone, and Japan, potentially escalating the conflict. Experts at The Goldman Sachs Group Inc. believe that such actions by the US administration will drive rising inflation and unemployment while effectively halting economic growth in the country. Can Gold Maintain Momentum? When it comes to technical analysis, the price of Gold is not trading at a price where oscillators are indicating the instrument is overbought. The Relative Strength Index currently trades at 68.88, outside of the overbought area, since Gold’s price fell 0.65% during this morning’s session. However, even with this decline, the price still remains 0.40% higher than the day’s open price. In terms of fundamental analysis, there continues to be plenty of factors indicating the price could continue to rise. However, the price movement of the week will also partially depend on the employment data from the US. The US is due to release the JOLTS Job Vacancies for February this afternoon, the ADP Non-Farm Employment Change tomorrow, and the NFP Change and Unemployment Rate on Friday. If all data reads higher than expectations, investors may look to sell to lock in profits at the high price. Key Takeaway Points: Gold’s Rally Continues – Up 17% in 2025 as investors seek safety from inflation, recession fears, and trade tensions. Trade War Impact – New US tariffs and potential retaliation from China, the EU, and Japan drive uncertainty, boosting Gold demand. Weak US Dollar – The Dollar’s struggle supports Gold’s rise due to their inverse correlation. Gold’s Outlook – Uptrend may continue, but US jobs data could trigger profit-taking. Always trade with strict risk management. Your capital is the single most important aspect of your trading business.   Please note that times displayed based on local time zone and are from time of writing this report.   Click HERE to access the full HFM Economic calendar.   Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click HERE to register for FREE!   Click HERE to READ more Market news.   Michalis Efthymiou HFMarkets   Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
    • Date: 31st March 2025.   Trump Confirms Tariffs on All Countries, Sending Stocks Lower.   The NASDAQ continues to trade lower due to the US confirming the latest tariffs will be on all countries. In addition to this, bearish volatility also is largely due to the higher inflation data from Friday. The NASDAQ declines to its lowest price since September 11th 2024. Core PCE Price Index - Inflation Increases Again! The PCE Price Index read 2.5% aligning with expert forecasts not triggering any alarm bells. However, the Core PCE Price Index rose from 0.3% to 0.4% MoM and from 2.7% to 2.8% YoY, signalling growing inflationary pressure. This increases the likelihood that the Federal Reserve will maintain elevated interest rates for an extended period. The NASDAQ fell 2.60% due to the higher inflation reading which is known to pressure the stock market due to pressure on consumer demand and a more hawkish Federal Reserve. Boston Fed President Susan Collins recently commented that tariffs could drive up inflation, though the long-term impact remains uncertain. She told journalists that a short-term spike is the most probable outcome but believes the current pause in monetary policy adjustments is appropriate given the prevailing uncertainties. Although, certain investment banks such as JP Morgan actually believe the Federal Reserve will be forced into cutting rates. This is due to expectations that the economy will struggle under the new trade policy. For example, JP Morgan expects the Federal Reserve to delay rate cuts but will quickly cut towards the end of 2025. Market Risk Appetite Takes a Hit! A big factor for the day is the drop in the risk appetite of investors. This can be seen from the VIX which is up almost 6%, Gold which is trading 1.30% higher and the Japanese Yen which is the day’s best performing currency. Most safe haven assets, bar the US Dollar, increase in value. It is also worth noting that all indices are decreasing in value during this morning's Asian session with the Nikkei225 and NASDAQ witnessing the strongest decline. Previously the stock market rose in value as investors heard rumours that tariffs would only be on certain countries. This bullish swing occurred between March 14th and 25th. Over the weekend, President Donald Trump indicated that the upcoming tariffs would apply to all countries, not just those with the largest trade imbalances with the US. NASDAQ - Technical Analysis In terms of technical analysis, the NASDAQ continues to obtain indications that sellers control the price action. The price opens on a bearish price gap measuring 0.30% and trades below all Moving Averages on all timeframes. The NASDAQ also trades below the VWAP and almost 100% of the most influential components (stocks) are declining in value.     The next significant support level is at $18,313, and the resistance level stands at $20,367.95. Key Takeaway Points: NASDAQ falls to its lowest since September 2024 as the US confirms tariffs on all countries, adding to inflation concerns. Core PCE inflation rises to 0.4% MoM and 2.8% YoY, increasing the likelihood of prolonged high interest rates. Investor risk appetite drops as VIX jumps 6%, gold gains 1.3%, and safe-haven assets outperform. NASDAQ shows strong bearish momentum, trading below key technical levels with support at $18,313 and resistance at $20,367.95. Always trade with strict risk management. Your capital is the single most important aspect of your trading business.   Please note that times displayed based on local time zone and are from time of writing this report.   Click HERE to access the full HFM Economic calendar.   Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click HERE to register for FREE!   Click HERE to READ more Market news.   Michalis Efthymiou HFMarkets   Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
    • PM Philip Morris stock, top of range breakout at https://stockconsultant.com/?PM
    • EXC Exelon stock, nice range breakout at https://stockconsultant.com/?EXC
×
×
  • Create New...

Important Information

By using this site, you agree to our Terms of Use.