What TimeFrame Dayrader Are You & Why?

[roztom 10]

Thanks for visiting this thread.. I am curious as to what the most popular/successful Daytrading timeframes/approaches are..

 

This question is not about whether you use a Tic Chart or Range Bars, etc but the criteria for the target range - targets/objectives of your trade.

 

There are many different types of trading timeframes. For the interday retail screen trader:

 

1. Trading for Several Points/Possibly Envelope Extremes - Rotations, etc. (Retail Scalper/Not Comparing to Floor Scalping))

 

2. Longer Interday Swing Trader: Going for the chuck of the range of the day. All In/All Out or Possibly Trading Several Rotations.

 

For each of these is it All In/All Out or Scaling?

 

I would also appreciate if you wouldn't mind sharing Why you have chosen one over the other. Is it alignment with your psyche, probabilities of hitting short-term targets if you are a scalper, Profitability, Risk/Reward Ratio if you hold for a chunk, etc.

 

In addition, have you integrated both approaches.. Retail Scalping and also managing a positon interday? How, what is different?

 

While there may be other strategies I think this would make up the bulk of daytraders..

 

Thank you for your time and consideration.. I hope this information will be helpful to those trying to find their "sweet spot."

[roztom 10]

To Clarify: When I use the term scalper I am not referring to someone who trades for a few ticks...

 

I am actually referring to ES points just to give a frame of reference...

 

Scalping to me is using a Bollinger Band or Keltner channel to Define a potential range..just my way of looking at it.. In ES that can be a number of points...

 

 

I do not believe the typical retail trader can "scalp" especially with the high costs...

[Mysticforex 13]

Hi Raztom, This could be an interesting thread.

 

I will trade any time frame where I see what I think is a high probability opportunity.

This could be 4 hour TF to 30 sec TF.

 

I look at the Weekly and Daily charts, for overall bias, But I don't recall ever having actually taken a trade off them.

 

 

Edit: Probably should mention I trade only Spot Forex.

[BlueHorseshoe 10]

Hi Roztom,

 

I 'swing trade', using daily bars and end-of-day order entry. However, if you were to look at my average winning trade, it would look more like what you might expect from daytrading. I never swing for the fences or ride trends like many swing traders do, and my typical holding time is only a few days.

 

I'm currently researching a strategy that incorporates a fixed dollar stop and target (not my usual style). Once again, this uses daily bars and EOD entries for the ES, but the target is only 6 points and the stop loss 10 points - so it starts to look much more like a daytrading strategy than anything else . .

 

I'm not sure what point I'm making, other than that things are never clear cut, and phrases like 'swing trading' and 'day trading' are simply convenient umbrella terms.

[Obsidian 10]

it is my pleasure visiting this thread:)

I use ichimoku clouds on 4h to follow the trend and look for breakouts. My time frame is between 4h and 30mins

[neoikon 10]

While this may not be completely what you're looking for, but...

 

For intraday ES trading, I like the 1597T chart (a fib series number) and the 89ema as a good intraday bias indicator. Yesterday (3/7/2012), after the market broke out of the morning's sideways movement, the 89ema acted as a nice support level many times.

 

While on the subject, I'm a fan of all the fib series ema's on the ES 1597T chart. The 21ema and 55ema showed their usefulness yesterday (3/7/2012) as well.

 

For entries, I like the 89T chart, which is like "zooming in" to the 1597T chart.

 

For lower volume instruments, like the NQ, then smaller fib series tick charts work well, such as the 987T.

 

I like tick charts because it allows the visual ebbs and flows to not be distorted by period of low volume. This also helps things like moving averages to not be distorted as well.

 

My ...

 

Best of luck in your trading!

 

Daniel

neoToolbox.com

[YertleTurtle 10]

I use daily, 1 hour and 5 minute charts to scalp and swing trade spot forex. Most of my signals come from the 1 hour and trades are executed on the 5 minute.

[roztom 10]

Thank you for your responses. This is very helpful..

 

Would you mind commenting to what extent you had challanges aligning your process psycologically so you could execute it consistently?

 

In my experience I developed systems that I could not execute since they created so much emotional noise, etc.. so not only did I need to develop a trading process but it had to align perfectly (closely) with my emotional / psycological makeup so I could execute consistently.

 

Have many of you been down this path?

 

Also: Re: Multi-timeframe approaches with the same Trade Plan... Ex. I trade Short-term Rotations which I manage with bands and if I see a directional move emerging I leave runners in place and manage differently..In other words I let it rotate against me since I do not want to risk giving up good trade location on a shallow counter-rotation... In fact if it rotates enough counter to the trend to an opposite side of Volitility envelope I may add to my postion - just like a continuation trade... hope this makes sense..

 

Are some of you doing this? TX

[jkshemaraja 10]

I trade the 30 seconds TF. I do no look at bigger TF ( only at the last three hours) and my trades are based on price action. Only indicator is the 20 ema for visual issues. I trade only eurusd with a spread less than a pip ( my platform have a 0.7 spread).

 

Mostly I trade during Asian session and my SL and TP is set the moment of entry at 7 pips.

My losses have an average of 4 pips. My risk per trade is 1 to 2% per trade, and I only take one trade at the time.

 

When we have winning trades we are not taken money out of the market, but we are taking money out of other traders. The right education is vital in my view to be able to make money.

 

My first trade of the day. Went short.

 

I trade the 30 seconds TF.

 

Prices broke the bottom level of the range.

 

Why did I not get in, when prices broke 9 candle before? Because there was not any build up before the break, (see the two doji just before my actual entry) and if there is not pressure, I like to stay aside (my favourite position)

 

Soon after my entry, she pulled back forming a double top (1 and 2) and went down through the round number of 1.3140.

Soon after that she pulled back strongly back to the double top, at that stage I was ready to get out of the trade if she was going to close above the double top, (less than my risk) but she did not and went down again and I got out before my TP got reached because a double bottom formed.

 

Made 4.9 pips on 2% risk (7 pips)

[BlueHorseshoe 10]

In my experience I developed systems that I could not execute since they created so much emotional noise, etc.. so not only did I need to develop a trading process but it had to align perfectly (closely) with my emotional / psycological makeup so I could execute consistently.

 

Have many of you been down this path?

 

In fact if it rotates enough counter to the trend to an opposite side of Volitility envelope I may add to my postion - just like a continuation trade... hope this makes sense..

 

Are some of you doing this? TX

 

Suitability to psychological makeup is a good question. I think it's often more of a compromise than many traders make out (like in the market wizards interviews where they always have a style that is perfectly suited to their personality - really?).

 

For example, I hate losing trades. This is not because I have a social hang-up about being a 'winner' rather than a 'loser'. It's because I know that every single system failure starts with a loss, and system failure is what I live in dread of. One obvious way to counter this would be to have a much more short term and higher frequency trading style. Then my periods between winning trades might be just a few hours, rather than weeks. At the same time, I know from experience that I am not well suited to daytrading for a whole host of reasons (tampering with positions, screen boredom, the need to work a full time job etc). So really what I am doing is a compromise - its the 'best fit' that I've found for my personality so far, but I wouldn't say it's perfectly matched.

 

As for the trading method you mentioned, then I see no reason why it shouldn't work. And I would have thought that the ES would be an instrument where it ought to be most likely to work well. There is a recent JSwanson thread about buying weakness and selling strength in the ES which might be of interest to you, as this is essentially what you're doing when you scale into a long at an excursion to a lower band.

 

Out of interest, what bands are you using?

[jkshemaraja 10]

Second trade of the day: long.

 

I missed at least another good set up (I was not around), but hey, they are all easy afterwards .

 

The trend was up and pulled back formed a two higher lows (1 and 2), I saw a bit of a battle going on and two dojis printed just below the signal line (yellow) and got in as soon as prices printed 1 pips above the high. I did not like those two pull back bearish candle just prior to my entry bar, I would had prefer a bit more pressure instead as dojis candle before the break.

 

Prices then pulled back below the signal line but still producing a higher low (3) and a test of that low (4). Clearly the bulls were still in control.

 

She then went nicely higher but not reaching my target, then a huge pullback but still forming another higher low.

 

The time she formed another double top and I got out. She did eventually reach my target, but hey I am not here to be right, I here to play my odds.

 

Made 5.1 pips on 2% risk (7 pips)

 

Total 9 pips for today (two trades), just over 2.5%.

[roztom 10]

Thanks for the post.. I do not use bands alone.. They must align with several indicators and also Volume Profile which I use to identify activity/volume at price. I look for the confluence and then step into the abyss.. :helloooo:

 

However, I'd like to keep this thread on point if I may...

 

What Timeframe Daytrader are You and Why?

 

The why refers to:

 

Risk Tolerance

Probabilities of specific targets

Psycology

Do you "need" a lot of short term winners?

Do you scale out?

Do you build a position on rotations & have targets?

Do you let the market take you out? Trailing Stops or ATR Stop, etc.

Do you exit if you have a fixed profit target?

Are you all in all out.. ?

 

Why is important, IMHO.. It speaks to profitability but IMHO also to psycological alignment.

 

I apologise for the questions but I think the answers will be very diverse... and educational for all of us.

 

When it comes to successful trading, as many experienced traders have written here previously, you cannot mimic/replicate someone elses plan... yet a numer do make a living at this... most probably do not..but would like to.. let's help them a bit.. and ourselves..

 

When I examine my own journey, my eyes roll back in my head when I think of what I've gone through, financially, emotionally and timewise...

 

Trading is like trying on an unlimited number of shoes until you find the ones that fit just right...

 

We can all learn from each other.

 

Trading is so much more than indicators - which is where everyone starts but that is not the answer it only opens the door to generate the questions...

Edited March 8, 2012 by roztom

[Nemesis 10]

My main chart is the 15min chart.

 

Particularly regular trading hours, no 24 hour data, and and encompassing anywhere between 3-10 days.

 

I also look at the 60min chart if the 15min is congested and requires further exploration.

 

From time to time I examine the Daily and Weekly charts for key areas of support or resistance and/or for long term plays.

 

When the market is reaching uncharted territory I might examine a monthly chart.

 

I cannot make sense of intraday charts so I never look at them.

[BlueHorseshoe 10]

Thanks for the post.. I do not use bands alone.. They must align with several indicators and also Volume Profile which I use to identify activity/volume at price. I look for the confluence and then step into the abyss.. :helloooo:

 

I don't know anything about volume profile - can you point me to any good threads to learn more about how it's used? Is it as 'complicated' as MP?

 

Thanks.

[roztom 10]

I don't know anything about volume profile - can you point me to any good threads to learn more about how it's used? Is it as 'complicated' as MP?

 

Thanks.

 

It is MP.. evolved to see it with volume as well as structure... It is a piece of my puzzle... there are many books on it and posts here at TL... Not easy and not a system or stand-alone.

[jkshemaraja 10]

Risk Tolerance

UP TO 2%

 

Probabilities of specific targets

?

 

Psycology

VERY IMPORTANT BUT NOT ESSENTIAL.

 

Do you "need" a lot of short term winners?

NO

 

Do you scale out?

NO

 

Do you build a position on rotations & have targets?

NO BUILDING

 

Do you let the market take you out? Trailing Stops or ATR Stop, etc.

NO, ONCE I GET MY 7 PIP I AM OUT, SOMETIME I GET OUT BEFORE DUE TO TECHNICAL REASONS

 

Do you exit if you have a fixed profit target?

YES

 

Are you all in all out.. ?

?

 

JK

[Millbrook 10]

I trade eur/usd on a daily basis. I used heiken ashi to determine what timescale was the most appropriate and concluded that 5 min. was 'best'. By this I mean it showed the turning points most accurately. Because I prefer tick charts I then substituted the 5 min for 450 tick.

 

Your point on psychology is interesting because I cannot resist looking at a much lower timescale. So I use a 50 tick chart as well as the 450. When both show an entry/exit I trade accordingly. I also use momentum based indicators and these have to be in synch on both timescales.

 

The only exception may be when the market is ranginging when I'll use the bolly bands but will set the parameters for the 50 tick chart to more closely match the 450 or the current range.

 

You need to be disciplined and be prepared to take the small trades. In effect it is a range based strategy which catches the breakouts. Breakouts can be added to when the lower timescale gives a further entry and the higher timescale remains unchanged.

 

It's an approach under development because although I identified the opportunity through visual backtesting I couldn't trade it at first because of the psychology of it. I tried to break from watching the lower timescale charts but couldn't so had to work at finding a way to integrate the intellectual with the emotion.

 

It's work in progress but I have just checked the entry and exit signals (by the way an exit signal then becomes an entry signal to trade in the opposite direction) for Thursday 8 March and the number of trades is shown below against the range of pips;

 

5 -10 12 trades

11 - 20 3

21 - 30 2

31 - 40 2

40+ 3

[bj139 10]

My main chart is the 15min chart.

 

Particularly regular trading hours, no 24 hour data, and and encompassing anywhere between 3-10 days.

 

I also look at the 60min chart if the 15min is congested and requires further exploration.

 

From time to time I examine the Daily and Weekly charts for key areas of support or resistance and/or for long term plays.

 

When the market is reaching uncharted territory I might examine a monthly chart.

 

I cannot make sense of intraday charts so I never look at them.

 

If you never look at intraday charts, how can your main chart be 15 min bars?

[jkshemaraja 10]

I trade eur/usd on a daily basis. I used heiken ashi to determine what timescale was the most appropriate and concluded that 5 min. was 'best'. By this I mean it showed the turning points most accurately. Because I prefer tick charts I then substituted the 5 min for 450 tick.

 

Your point on psychology is interesting because I cannot resist looking at a much lower timescale. So I use a 50 tick chart as well as the 450. When both show an entry/exit I trade accordingly. I also use momentum based indicators and these have to be in synch on both timescales.

 

The only exception may be when the market is ranginging when I'll use the bolly bands but will set the parameters for the 50 tick chart to more closely match the 450 or the current range.

 

You need to be disciplined and be prepared to take the small trades. In effect it is a range based strategy which catches the breakouts. Breakouts can be added to when the lower timescale gives a further entry and the higher timescale remains unchanged.

 

It's an approach under development because although I identified the opportunity through visual backtesting I couldn't trade it at first because of the psychology of it. I tried to break from watching the lower timescale charts but couldn't so had to work at finding a way to integrate the intellectual with the emotion.

 

It's work in progress but I have just checked the entry and exit signals (by the way an exit signal then becomes an entry signal to trade in the opposite direction) for Thursday 8 March and the number of trades is shown below against the range of pips;

 

5 -10 12 trades

11 - 20 3

21 - 30 2

31 - 40 2

40+ 3

 

I am also interesten in tick candles(70 tick), cannot find a broker that supplies that. Any suggestions?

[Nemesis 10]

If you never look at intraday charts, how can your main chart be 15 min bars?

 

Because my 15min chart has like 10 days of data.

[roztom 10]

I trade eur/usd on a daily basis. I used heiken ashi to determine what timescale was the most appropriate and concluded that 5 min. was 'best'. By this I mean it showed the turning points most accurately. Because I prefer tick charts I then substituted the 5 min for 450 tick.

 

Your point on psychology is interesting because I cannot resist looking at a much lower timescale. So I use a 50 tick chart as well as the 450. When both show an entry/exit I trade accordingly. I also use momentum based indicators and these have to be in synch on both timescales.

 

The only exception may be when the market is ranginging when I'll use the bolly bands but will set the parameters for the 50 tick chart to more closely match the 450 or the current range.

 

You need to be disciplined and be prepared to take the small trades. In effect it is a range based strategy which catches the breakouts. Breakouts can be added to when the lower timescale gives a further entry and the higher timescale remains unchanged.

 

It's an approach under development because although I identified the opportunity through visual backtesting I couldn't trade it at first because of the psychology of it. I tried to break from watching the lower timescale charts but couldn't so had to work at finding a way to integrate the intellectual with the emotion.

 

It's work in progress but I have just checked the entry and exit signals (by the way an exit signal then becomes an entry signal to trade in the opposite direction) for Thursday 8 March and the number of trades is shown below against the range of pips;

 

5 -10 12 trades

11 - 20 3

21 - 30 2

31 - 40 2

40+ 3

 

Mill: To a certain extent I have a similar setup.. My high timeframe is a 15m and that is only so I don't lose the larger picture and then I drop down to range bars... 1.25 and 0.5 for Trigger and Entry.. I also overlay larger TF BB's on the shorter Entry TF.

 

I think the need to go to a lower timeframe is to attempt to increase accuracy or precision and potentially also to reduce risk... That may be the psycological aspect... I know that if I enter a trade (ES) and I could have gotten in .75 pt better if I was more precise or didn't wait to see a little better movement in my direction then I always think I should go to a lower timeframe... but that creates it's own problems..

 

It is IMHO a conflict between the need for precision and the need for a winning trade... I suspect the winning trade is more probable with a slightly higher timeframe than with the micro TF with a lot of noise.. I have that issue myself and have accepted that this is not about surgical precision but good trade location within specific risk parameters - of course it doesn't take away the satisfaction of a well timed precise entry - just I have not prioritized it over the overall outcome..

 

Thanks for the post..

[BlueHorseshoe 10]

I have that issue myself and have accepted that this is not about surgical precision but good trade location within specific risk parameters - of course it doesn't take away the satisfaction of a well timed precise entry - just I have not prioritized it over the overall outcome..

 

Thanks for the post..

 

Hi Roztom,

 

This is just an idea that may be useful or not . . .

 

What would happen if you found your precise entries from the micro timescale, but used the same stop-loss and target that you would use if entering from the 15 minute chart? In theory this would mean that your actual risk:reward (in terms of a hard stop) wouldn't be reduced, but that the likelihood of an uncomfortable adverse excursion would be reduced (assuming your micro timescale entries are actually good).

 

Without wanting to be insulting, this would allow your ego to 'play' with the entry, without any possible negative impact on performance, and with the possible 'reward' of reduced intra-trade drawdowns. By sticking with the higher timeframe stop and target but still entering from the micro timeframe, the micro-timeframe entry would become more of a fun game, where 'winning' with a to-the-tick entry feels good, and 'losing' doesn't hurt your actual dollar performance - a bit like trading in sim!

 

Of course, all of the above assumes that your strategy shows a positive edge when traded in the higher timeframe with that stop and target.

 

Hope that's helpful and makes sense!

 

Bluehorseshoe

[roztom 10]

Hi Roztom,

 

This is just an idea that may be useful or not . . .

 

What would happen if you found your precise entries from the micro timescale, but used the same stop-loss and target that you would use if entering from the 15 minute chart? In theory this would mean that your actual risk:reward (in terms of a hard stop) wouldn't be reduced, but that the likelihood of an uncomfortable adverse excursion would be reduced (assuming your micro timescale entries are actually good).

 

Without wanting to be insulting, this would allow your ego to 'play' with the entry, without any possible negative impact on performance, and with the possible 'reward' of reduced intra-trade drawdowns. By sticking with the higher timeframe stop and target but still entering from the micro timeframe, the micro-timeframe entry would become more of a fun game, where 'winning' with a to-the-tick entry feels good, and 'losing' doesn't hurt your actual dollar performance - a bit like trading in sim!

 

Of course, all of the above assumes that your strategy shows a positive edge when traded in the higher timeframe with that stop and target.

 

Hope that's helpful and makes sense!

 

Bluehorseshoe

 

I get what you are suggesting... Of course the fifteen minute bars are key swing points and stops will cluster under them.. In addition the typical ES range might be 10 pts or so avg depending on the day... If the day is rotational then the risk on the 15m bars would be too large relative to the typical range...potentially.. then the risk reward issue comes in...

 

If we have a trending day then pulling the microscope out makes sense. However then you are changing from a short term swing trader going for 3 - 4 points on rotations to a position type trader.. This requires 2 different strategies to manage targets/exits/risk, etc.

 

I believe you need 2 different money managent/trade management approaches and manage runners different than shorter term rotations...

 

That is what the question is about why has someone selected a specific timeframe to trade in, especially in the day timeframe.. Tx