One Time Framing - OTF

[FFTrader 10]

Does anyone know a good explanation of the One Time Framing concept and how to use it with the Value Area?

 

Lost my notes ... so any help is appreciated.

 

Thanks!

[OAC 10]

Where is Reaver ?

[Successlife 10]

Sorry for my Tarzan English.

One-time-frame us when the market move in olny one direcction

As a trend day

One Time Frame is when the Long Tern buyeres or seller are in control

Obviosly. the DVA and the DPOC move in the same directions of the trend days

[Reaver 10]

FFTrader,

 

I may have misunderstood the question, but yes like successlife stated...the standard definition (to my knowledge at least) of One Time Frame concept is when one time frame trader is in control...(such as the floor traders, commercials, public,etc)....two time frame market means basically that there is essentially a deadlock between two different time frame participants.

 

Am I on the right track as to answering what you are asking?

 

Now as far as using value....once again, not sure exactly what you're asking..but generally in a one time frame market, you'd be looking for breakout trades (this assumes a market is balancing, as there is no way to know value in an unbalanced market...if a market is in a one time frame control too long and is in fact trending...there really is no value).....so if I am understanding your question correctly...this would be a day you'd be looking for breakout trades at bracket extremes hoping for trend to start...

 

If a breakout failed, then maybe in fact you went from intially having a one time frame to a two time frame market (commercials may have stepped in and capped) so then you could look for a responsive trade, hoping for price to revert to value.....or maybe if you're lucky to the other bracket extreme (but don't push your luck too far on that one....)

 

I hope I answered the question you were asking....if not, try to elaborate a little on what exactly you are asking.

[FFTrader 10]

Hi all,

 

Thanks for the replies. I guess in further details, I would like to know:

 

1. How is OTF being used in trading ES S&P e-mini futures - AFTER one has decided or seen that there is a trend.

2. I understood it that we need to apply it as a trend following concept once we are in a trade?

3. How or when should we initiate an OTF type trade with lower risk?

 

Thanks.

 

FFTrader,

 

I may have misunderstood the question, but yes like successlife stated...the standard definition (to my knowledge at least) of One Time Frame concept is when one time frame trader is in control...(such as the floor traders, commercials, public,etc)....two time frame market means basically that there is essentially a deadlock between two different time frame participants.

 

Am I on the right track as to answering what you are asking?

 

Now as far as using value....once again, not sure exactly what you're asking..but generally in a one time frame market, you'd be looking for breakout trades (this assumes a market is balancing, as there is no way to know value in an unbalanced market...if a market is in a one time frame control too long and is in fact trending...there really is no value).....so if I am understanding your question correctly...this would be a day you'd be looking for breakout trades at bracket extremes hoping for trend to start...

 

If a breakout failed, then maybe in fact you went from intially having a one time frame to a two time frame market (commercials may have stepped in and capped) so then you could look for a responsive trade, hoping for price to revert to value.....or maybe if you're lucky to the other bracket extreme (but don't push your luck too far on that one....)

 

I hope I answered the question you were asking....if not, try to elaborate a little on what exactly you are asking.

[Reaver 10]

Not sure I totally understand the question, especially #1 but as far as how I trade using market generated data, I wouldn't use OTF at all after determining the trend. If a market is already trending, first off, it is already an OTF market, and I am not going to mess with it. I have effectively missed the bus at this point...so I will start looking elsewhere. I am watching for a balancing market, at which point I am looking to see what is going on by the participants....that way I can potentially determine the beginning of a One Time Frame controlled market, which for me would be a breakout. Of course, that is only half of the equation as there are responsive trades that one can take which of course would require a two (or more) timeframe participant market.

 

As far as looking for an "OTF type trade" with lower risk, for me at least, this would entail watching the market participation and parsing the market generated data to determine which direction (if any) you favor for a breakout. Of course, you would also look at the volume/price over time distribution to determine potential risk/reward for a trade candidate.

 

Once again, I really don't understand your questions, as they don't really make sense ( I say that with the utmost respect as English may not be your native language, or you may be a raw beginner, which I totally understand BELIEVE ME) but I hope I helped.

 

Again, if this didn't answer the questions you had, let me know and I'll try again.

[FFTrader 10]

Thanks Reaver. Let me see if I can change the language a little. I think what I am trying to get at is the following:

 

"Once I am already in a trade and hopefully at the end of a balancing market period, how should I stay with a trade using the one time framing concept?"

 

That is, I do not know what is one time framing (lost my notes, etc.) and I am fairly new to trading (but loving it). However, I do know enough about Value Area, breakouts, trends, taking profits when in a good trade, etc.

 

Thanks.

 

Not sure I totally understand the question, especially #1 but as far as how I trade using market generated data, I wouldn't use OTF at all after determining the trend. If a market is already trending, first off, it is already an OTF market, and I am not going to mess with it. I have effectively missed the bus at this point...so I will start looking elsewhere. I am watching for a balancing market, at which point I am looking to see what is going on by the participants....that way I can potentially determine the beginning of a One Time Frame controlled market, which for me would be a breakout. Of course, that is only half of the equation as there are responsive trades that one can take which of course would require a two (or more) timeframe participant market.

 

As far as looking for an "OTF type trade" with lower risk, for me at least, this would entail watching the market participation and parsing the market generated data to determine which direction (if any) you favor for a breakout. Of course, you would also look at the volume/price over time distribution to determine potential risk/reward for a trade candidate.

 

Once again, I really don't understand your questions, as they don't really make sense ( I say that with the utmost respect as English may not be your native language, or you may be a raw beginner, which I totally understand BELIEVE ME) but I hope I helped.

 

Again, if this didn't answer the questions you had, let me know and I'll try again.

[Reaver 10]

If you're asking what "One Time Frame Market" means: it means that one market participant group is in control....such as the public...there are the 4 Cti (Customer Type Indicator) groups: Floor, Commercials, off floor members, and Public...

 

Almost, if not all the time the public will be the ones to drive the price out of balance. Basically you are looking for this to happen..the transition from a multiple time frame (bracketing or ranging market) to a trending market (breakout from value)...

 

If you caught the trade at the right time, now you're in and the public (usually) has control...

 

at this point you are waiting for evidence that the One Time Frame market has started to stall....you will start to see evidence of contrary opinion in strength...usually in the form of commercial capping (Cti 2 on the LDB). Depending on your personal viewpoints and methods, you may choose to get out at this point...

 

If you are strictly a profile trader and do not use other market generated data, you may start to see congestion in the form of TPOs (ie where you were seeing range extension, now you are seeing multiple TPOs or rotation.) This generally entails a noticeable increase in volume as well....

 

This indicates the beginning of acceptance of new value...and it's a good time to get out and wait for a disagreement of value again so you can do your thing.

[alleyb 10]

a simple definition of a one time frame market is constantly moving in one direction with no break of trend. IE higher lows higher highs or lower highs lower lows. IE no break of rotation of a previous time period

[alleyb 10]

further on one time frame market: and as to when to get out: you stay until you get a break of rotation. The question as to when to get IN then that is more difficult to explain because the one time frame market is a trending market and one has to foresake trade location to be on board a trending market. By inference a one time frame market is driven by those who have the wrong position or who are trying to fade the move who constantly place their stop just above the currrent dynamic high/low and so as each new high/low is attained so it trips further stop loss orders and creates and fuels the move

[Soultrader 12]

further on one time frame market: and as to when to get out: you stay until you get a break of rotation. The question as to when to get IN then that is more difficult to explain because the one time frame market is a trending market and one has to foresake trade location to be on board a trending market. By inference a one time frame market is driven by those who have the wrong position or who are trying to fade the move who constantly place their stop just above the currrent dynamic high/low and so as each new high/low is attained so it trips further stop loss orders and creates and fuels the move

 

Hi alleyb,

 

Wouldnt an exit at the break of a rotation be extremely late? For example, in a declining market a short cover at a break of a location would indicate exiting after the first signs of short covering and possiby at the same time as counter trend momentum type traders who look to ride the bounce. I currently trade the Nikkei and as the tick value is big, seeing even 3-4 ticks of paper profits disappear on the PNL is quite big. Which is why I see more scalpers than intraday position traders on this market. I currently tend to exit at intraday volume spikes on a decline and narrow range bars followed by a wide range bar in an uptrend.

[alleyb 10]

James. Different strokes for different markets. The Nikkei does not actually have that many genuine one time frame or late running profile. The Dow for example when it gets into such a move it is not unusual for it to move 100 points. You could start to adjust an exit for any number of styles. EG an inside 15 minute bar and exit on break against the direction, a 5 minute bar that breaks and/or closes below the low/high (depending on upmove/downmove) of the high / closes above the high of the low bar. The whole point about any trade but especially one that is correctly identyfied as a one time frame profile is to allow sufficient time for the market to breathe (rather than being swayed by the 5 minute voodoo chart). You will always know when you are overstaying your welcome in the market by the lack of development. Slightly out of context I assume you trade the Singapore Nikkei 225 contract? or do you really play with fire in Osaka?

[Soultrader 12]

Thanks for the response alley. Makes sense especially with the Dow reference since I used to trade that instrument for a few years. I do not trade the SGX Nikkei but the OSE big Nikkei

 

The OSE contract is a completely controlled by scalpers from observation. It is very common to see 2-3 traders hit the bid/ask with 300-500 contracts and play for 1-2 ticks. Which amounts to close to $60,000 - $90,000 a scalp. Very strange but aggressive market the Nikkei is.

[FFTrader 10]

Reaver,

 

Thanks for the replies. Would you have a chart pattern and/or decision process to actually trade this?

 

Thanks in advance.

 

FFTrader,

 

I may have misunderstood the question, but yes like successlife stated...the standard definition (to my knowledge at least) of One Time Frame concept is when one time frame trader is in control...(such as the floor traders, commercials, public,etc)....two time frame market means basically that there is essentially a deadlock between two different time frame participants.

 

Am I on the right track as to answering what you are asking?

 

Now as far as using value....once again, not sure exactly what you're asking..but generally in a one time frame market, you'd be looking for breakout trades (this assumes a market is balancing, as there is no way to know value in an unbalanced market...if a market is in a one time frame control too long and is in fact trending...there really is no value).....so if I am understanding your question correctly...this would be a day you'd be looking for breakout trades at bracket extremes hoping for trend to start...

 

If a breakout failed, then maybe in fact you went from intially having a one time frame to a two time frame market (commercials may have stepped in and capped) so then you could look for a responsive trade, hoping for price to revert to value.....or maybe if you're lucky to the other bracket extreme (but don't push your luck too far on that one....)

 

I hope I answered the question you were asking....if not, try to elaborate a little on what exactly you are asking.

[brownsfan019 17]

Let's see... Reaver's status:

 

Last Activity: 11-27-2007 02:43 PM

 

And this thread:

 

Last Activity: 10-28-2007, 12:54 AM

 

Maybe try to find a thread from the year 2008. The most recent, the better.

 

[FFTrader 10]

I did not see the thread brownsfan019 ... but if you or anyone else have a chart or something that shows the pattern, it will be a great help.

[alleyb 10]

FFTrader I will try to help re chart but I need to know something first so that I can find a bespoke (to you) scenario (hopefully). What are the markets that you trade and what is your modus operandi. IE scalper, swing etc...how long do you stay in a trade, and if possible what is your defined method of risk management. I am asking for quite a lot I know but I want to try to find something that is in context for YOU

[FFTrader 10]

alleyb,

 

I am a day trader and I trade the ES futures contract only (per CME/GLOBEX). Currently I am scalping with real money and experimenting with hold a trade with paper money. I look at previous support/resistance and Value Area mostly but also try to collaborate with Fibonacci numbers, moving averages, candle patterns, momentum and swing indicators, etc. My risk management is 2.25 points max and 1.50 points min and if I have two loosing trades in a day I quit immediately. I do not know how long I should stay in a trade but this OTF question will help me in that regards.

 

Thanks.

 

FFTrader I will try to help re chart but I need to know something first so that I can find a bespoke (to you) scenario (hopefully). What are the markets that you trade and what is your modus operandi. IE scalper, swing etc...how long do you stay in a trade, and if possible what is your defined method of risk management. I am asking for quite a lot I know but I want to try to find something that is in context for YOU

[alleyb 10]

Here's a weekly continous chart of the British Pound.

It has been possible at varying moments in this chart to fade the moves however the returns afforded were frequently less than 50 tics (or pips as the FX guys refer to the tic) although there were upmoves of approx 150 in the 4hourly chart (with ATR of 50-75 tics per bar) and in reality the faders were just doing the bidding that the one time frame seller needed to create the necessary liquidity to keep selling that turned into at times almost open mouth disbelief at how far can the move carry on as the faders exited at each and every fresh break of the lows.

What has become evident from this chart in the lower time frames is the seller operated early in the move at 1am Chicago time IE it was UK driven. (Note more Hedge Funds exist and manage their money out of London than any other center these days) but then there were secondary moves of selling that came in around 7:20am with the official opening of Pit Futures trading. (Yes yes I know the markets are electronic blah blah but this latter point is perhaps better kept for a discussion another time and on another thread).

PS:The chances are that we are trading 1.7037-1.8470 with 1.7375/1.7395 as a hidden pivot for the Dec 2008 contract

[alleyb 10]

Here's the MP chart for S&P for Friday 8/29. It's not necessarily an ideal day for what you are looking for However there are many aspects which are close.

 

Additional to my comments on the chart there were certainly some interesting Fib Ratios to be noticed.

The G period lows coincided with the Gap from 8/27 and the 38% from the 1261 low on 8/20 to 8/28 high at 1300

and the day's lows coincided with 50% (PS this is not a Fib number as so many would like everyone to believe but is just the mean) from the 8/26 lows to 8/28 high

 

The question as to how long to stay in a trade means that you have to descend down (or even up) the timeframes to establish what time frame the market is actually auctioning

EG: The Market started in roughly a 15-30 minute until the 1292-1290 area was broken at which point it descended into varying modes of 1-5 minute charts then it expanded the time frame backout for the doldrums to 15-60 minutes again before the sell down which was then back to the 1-5 minute charts. Unfortunately Friday was not really a very good example for the purposes of this threads excercise in terms of demonstrating how the auction time frame moves from say a more normal 30 minute or longer down to the 1 minute chart and back out.

 

In terms of moving averages then on a 5 minute chart once the 100 period was broken the control ma appears to have been the 10 period on the 10 minute

Edited August 31, 2008 by alleyb
to attach a chart

[suriNotes 11]

This thread has very valuable information but I want to address

FFTrader's question in a new post.

 

I recently presented a free seminar on my research

about the Tick/Time frame relationship and 'How to Select Best Chart Time-Frame for Trading Styles'. This research is presented from a

short-term traders (intraday) perspective using Tick charts and E-Mini instruments (@ES, @YM, @NQ, @ER2) data...

 

I'll compile some recent data and post this topic in detail very soon.

 

Regards,

Suri

 

 

 

alleyb,

 

I am a day trader and I trade the ES futures contract only (per CME/GLOBEX). Currently I am scalping with real money and experimenting with hold a trade with paper money. I look at previous support/resistance and Value Area mostly but also try to collaborate with Fibonacci numbers, moving averages, candle patterns, momentum and swing indicators, etc. My risk management is 2.25 points max and 1.50 points min and if I have two loosing trades in a day I quit immediately. I do not know how long I should stay in a trade but this OTF question will help me in that regards.

 

Thanks.