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shooly76

10 Min Chart Vs 3 Min Chart??

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will someone please explain the difference... and pros and cons of these 2 time frames?

 

less noise w a 10 min chart= higher probability trades??

 

Ive been trading 6E, 6A, CL, GC, and TF on a 3 min chart, and havent been doing well at all. I was trading a 5 min chart, but decided to try a 3, now Im thinking about a 10

 

any input much appreciated

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  shooly76 said:
will someone please explain the difference... and pros and cons of these 2 time frames?

 

less noise w a 10 min chart= higher probability trades??

 

Ive been trading 6E, 6A, CL, GC, and TF on a 3 min chart, and havent been doing well at all. I was trading a 5 min chart, but decided to try a 3, now Im thinking about a 10

 

any input much appreciated

 

I use 5 min on ES and 2 min on YM and 1 min on HSI

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  shooly76 said:

 

less noise w a 10 min chart= higher probability trades??

 

 

One man's noise is another man's information.

 

The problem is with your strategy. Selecting the right TF is only part of the strategy. Re-work your strategy from scratch, and it should become clear which TF you need to focus.

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Chart increment settings are very important as it's amazing how the exact same market can look different through different views. And there's plenty to choose from:

 

Minute charts

Sub-minute charts

Volume based charts

Tick based charts

Momentum based charts

 

And even more than that.

 

You have to find what works for you. If you want to smooth out the noise, look at charts not based on time and see how they look for you. For example, in a fast moving market, tick or volume charts will be very active - and not so active when it's slower. I find it easier to make money when things are really moving, so non-time based charts help there.

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  Do Or Die said:
One man's noise is another man's information.

 

;) You got that right. :rofl: It's all information. It's about how the information is processed and interpreted. And whether the information has any correlation to price or not.

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  shooly76 said:
will someone please explain the difference... and pros and cons of these 2 time frames?

 

less noise w a 10 min chart= higher probability trades??

 

Ive been trading 6E, 6A, CL, GC, and TF on a 3 min chart, and havent been doing well at all. I was trading a 5 min chart, but decided to try a 3, now Im thinking about a 10

 

any input much appreciated

 

Noise implies that something is not very useful and it can't be understood.

 

How fast are you able to make a decision and act on it? The faster you are able to make a decision and act, the shorter the time frame you can trade. It's all relative. What you might be experiencing on the shorter time frame, is loosing track of what is really going on with the trend by focusing to narrowly on what the price bar is doing in the short term. You can get "hypnotized" by the price moves and stop paying attention to what you really need to focus on.

 

I'd like to make a distinction between "noise" and speed. To me, noise is something that is distracting, you can't make any sense out of it, and it's confusing. So back to my point about how fast you can make a decision. If the price is moving very fast, and the speed somehow causes you take your focus away from what the trend is really doing, then it's "noise". What is "noise" to you, might be opportunity for someone else. Price does exactly the same thing whether you are looking at a 10 minute chart or a 1 minute chart. The issue is about how you perceive, process and act on the information. That's a personal evaluation you must make about yourself. To me, that's part of the issue.

 

To DoOrDie's point about your strategy; if your strategy is not good, then it's all noise.

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i recommend 5m rather than 3m. because 5 is divisor of 10.

if you research intraday volume trend you'll realized that automated orders tends to be executed at X0min 00 secs

i don't know who it is. probably institutional trader's machines and individual system traders as well.

however it could be a bit different in your market. so research first.

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thanks for all the helpful replies! I had 2 nice trades (live) for a total of 35 ticks today w TF

 

I am going to stick w what worked for me in the past.. a 5min, and a 30min (for overall movement), trend... (or lack thereof in some cases).

 

I reworked trend-following system a bit.. and now I wait for retracement back toward EMA and SMA

5aa7109fe13a5_TF09-11(5Min)8_31_2011.jpg.552f6e196e46127a85152620e49df07a.jpg

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oh I almost forgot, the yellow circle on the chart shows where price broke both EMA and SMA, I gathered this shows uncertain or hesitant direction in trend movement.. so I chose NOT to enter again.

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Another factor is risk tolerance. A 10m chart may provide a view in which a stop will need to be larger than if you were to use a 3m chart.

 

Also, the more volatile the market, the more you may need a faster chart. I trade CL, and find a 1m chart provides a nice entry view, if one is patient enough and does not get caught up in the excitement. My "base" chart is a 5m. I also have up a 15m for intraday structure, a 60m for an intraweek view, and daily for longer term views. I use a 25 tick for a more logical structure when things are slow, and for seeing within the 1m bars when things are very fast. Finally, I use volume charts for weekly and monthly profiles, where I do not need to see volume information.

 

It's all about what works for you.

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This has been a dilemma for me as well. I have been experimenting on the cable with a demo FX account.

 

If you are using any trend following system that uses moving averages, then the longer your time-frame is, the more accuracy you will have. I am currently manually back-testing some M/A based systems on Meta-trader, and I've found that the 5 minute chart filters out many bad trades that you'll get on the 3 minute chart. At the same time, you won't get the lag that you get on a 10 minute chart.

 

As far as stop losses are concerned, look up Linda Raschke's video titled "How to Use Stops, Why Trade with Stops, How to Determine Stops". She says that the wider your stop, the better your accuracy. She recommends an initial stop of 3 ATR. She also tested time-based stops on the daily chart, and she found that you should exit a trade if it doesn't work out within 7 bars. I reckon that would work well on a lower time-frame as well.

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