Determining Which Time Frame is In Control

[Tradewinds 12]

It seems that the market is reacting to different time frames at different times. It seems like sometimes the price is following signals from a shorter time frame, and sometimes it's following signals from a longer time frame. I'm going to be testing something new about how to determine which time frame to take the signal from. I'm looking for Uptick/Downtick consolidation on a 3 minute chart, and then looking at how long that consolidation lasts. If the consolidation lasts 5 minutes, then I'm going to take signals from a 5 minute chart. If the consolidation lasts 15 minutes, then I'm going to take signals from a 15 minute chart. I'm defining consolidation as BOTH lower uptick highs AND higher downtick lows. So both the upticks and the downticks are getting less and less, There is not much action, things are slow. Depending upon how long this decrease in activity lasts, that will determine what time frame chart I decide to use.

 

I'd like to know what people think of this idea.

[khamore1 10]

It seems that the market is reacting to different time frames at different times. It seems like sometimes the price is following signals from a shorter time frame, and sometimes it's following signals from a longer time frame. I'm going to be testing something new about how to determine which time frame to take the signal from. I'm looking for Uptick/Downtick consolidation on a 3 minute chart, and then looking at how long that consolidation lasts. If the consolidation lasts 5 minutes, then I'm going to take signals from a 5 minute chart. If the consolidation lasts 15 minutes, then I'm going to take signals from a 15 minute chart. I'm defining consolidation as BOTH lower uptick highs AND higher downtick lows. So both the upticks and the downticks are getting less and less, There is not much action, things are slow. Depending upon how long this decrease in activity lasts, that will determine what time frame chart I decide to use.

 

I'd like to know what people think of this idea.

 

 

I will tell you how Jim Dalton see longer time frame, he looks at monthly, sometimes at weekly chart. But longer time frame ALWAYS dominate the market when they are in it

 

Longer time frame does not know or care about mechanical signals, like pivot points, stochastic, single prints etc… their only care is significance level .

 

The only time the shorter timeframe dominate is when the market is ranging luck of direction and confidence (I'm selling you what I learned from Jim)

Edited February 4, 2012 by khamore1

[TheDude 10]

An interesting idea TW. It makes sense. Perhaps you could post a chart of the up tick/down tick indicator you mention?

 

I sometimes read the electronic local blog and he does a similar thing - switches to lower range bar charts in times of low volatility. He occasionally posts here.

 

Personally, in these markets, I find doing the opposite beneficial - I've switched to longer time frames and position trade off a 30min chart. I just get too bored trading these markets sitting and watching it do noting. Thats when silly trades happen for me.

 

The lack of both volume and volatility suggests the lack of 'other time frame' activity. I think all thats there at the moment is people who 'must trade' and spreaders against the ym or nq. even hft's tend to turn off in low vol. That means I bet we auction down some time soon as trade isnt being facilitated very well at these levels.

[aadambell 10]

Thanks the Dude, i shall keep your advice.