With Jalarupa's kind permission :
>> What time frame are you trading?
Its a bit hard to explain. But I would love to share so that we can all learn from each other. I hope to be corrected and critised at any part where I am wrong thou.
I realised what TRO said is correct. Price is really same on all timeframes. The only thing that is really different is what is the price doing according to a different timeframe. Sometimes its doing the same thing for all timeframes = price is trending/starting reversal (i think TRO is correct here), sometimes its not = price is ranging/correcting (this is where i believe Wavetop/SB has to be credited). So both of them are correct? Just that both of their trading method are constrast upon each other I suppose?
So which is the 'best' timeframe? According to my previous Pip/Time efficency research (I posted it somewhere in the forum), M15 seems to be the 'best'.
But M15 has its problems. For a long time, I combined the new Rat + SB trading on M15. Found alot of success trading demo using M5 avg range as SL and M15 as TP. But I wasn't quite happy with the results. M15 range is too small to profit on, even through I am getting very consistent results getting 5 pip profits, scaling in and scaling out. But trading like this is very tiring!
I figured I need a bigger timeframe to rely on. But I found many problems with the conventional timeframes we have on standard charting programs, mainly MT4 here. The general idea is to 'find' the timeframe that 'the entire world agrees on', so that the 'entire world moves the market'. LOL. Seems silly at first but it made sense to me later. If the world doesn't move together in agreement, how can I profit from it? (remember what TRO said about all xxxUSD pairs going down together if EURUSD is also going down?)
Tick data and M1 is too small
M5 is ok, but somewhat small according to Pip/Time Efficency
M15/M30/H1 are just nice, avoiding timezone problems, along with H1 being the best. This is why TRO saying trade according using H1 color works.
H4 and D1 inherit timezone problems. e.g A H4 candle using GMT time is obviously different from one using NY time.
Wavetop/SB kept insisting the relationship between time and price. So I started my research from here. Supposingly by accident! I was attempting to use SB + new rat on D1 candles. My demo broker was using standard GMT time candles. I placed a trade 30 mins after the new D1 candle formed + SB = gives signal + new rat = gives signal. I profited like 50 pips easy (which happened to be 1/3 of a daily candle avg range).
But I was puzzled. Why did it work? All I had to do is to remember I had success using SB + new rat on M15. If I can catch a good M15 candle easily every time it forms, why not for a D1 candle? Wow how about W1?!!! This means I had to overcome the time zone problem. Also, I had problems using the Old Rat when the standard D1 candle is still newly formed + doesn't have enough range yet. So why not try something crazy?
I tested using M15/M30/H1 as basic timeframe units. Coming up with something called Continuous Candle. Hope it makes sense :
D1 = 96 x M15 candles or 48 x M48 candles or 24 x H1 candles
W1 = 5 x 96 x M15 candles or 5 x 48 x H1 candles or 5 x 24 x H1 candles (5 trading days per week)
M1 = 24 x 96 x M15 candles or 24 x 48 x M48 candles or 24 x 24 x H1 candles (approx 24 trading days per month, overlapping over I think is fine)
Then I applied this candle's data onto the following :
Old Rat -> Daily + Weekly + Monthly
Real Time (Signalbender modified)
I also applied the same timeframe logic onto LWMA with 0.5 and 2 standard dev.
All this is worth 3 months of work. Whew!
>> Have you tried using the Continuous Candle with the other CC methods?
I quit don't understand the question... can you explain?
Last edited by Relativity
on Fri Feb 04, 2011 5:04 pm, edited 1 time in total.