How vital is the timeframe that you pick for your charts?

[brownsfan019]

This past week I've had a bit of a realization, in part to my interaction with james_gsx in the candlestick corner... what you pick for your chart timeframe is so incredibly vital that I think it's easy to overlook.

Allow me to ramble...

In my opinion, the lower the timeframe you go, the more focused on that specific chart(s) you become. For example, I recently had my ES chart down to a 2000 VBC. For those not familiar with the VBC, a 2000 setting can literally print candles in SECONDS. 2000 contracts traded in a quick moving market is nothing. It's actually quite amazing to take a step back and watch. To see what I mean, turn a 2000 VBC on during the first 30 minutes, the last 30 minutes or around econ news (esp Fed). My point being that I literally could only trade the ES at this level. It required my undivided attention.

Now, that was/is not necessarily a bad thing; however, I soon realized that I really narrowed down my potential trading targets to one market. As some here might recall, I used to post about the EC (Euro Fx) and we had a thread about the CL (Crude Oil) going as well. Well, those markets became a distant past with a 2000 ES VBC Chart.

So my question/dilemna as I think about my trading biz currently is: is focusing exclusively on the ES with a small timeframe (and many, many trades as a result) more or less advantageous for me vs. kicking up the timeframe on the ES to then open the doors to the other markets once again....

There's no quick and easy answer (at least for me right now). It's hard to complain when the ES is treating you well with your current setup; however, this is all about exploiting as many opportunities as possible while they are there. And if I am glued to the ES while the EC and/or CL are producing incredible trading opportunities, what is my cost? Again, not an easy answer and more rhetorical than anything.

In the end, I wanted to get this out there so others could learn from my struggles currently to find that balance of exploiting the opportunities as they arise. In a perfect world, I could have a computer do all this for me, and before we go there, I am not interested in that. Whether it's old fashioned or what, I enjoy trading and doing it myself. That may be an opportunity cost that I have to deal with.

So I would highly recommend that all traders, seasoned or new, to at least glance at other chart timeframes occasionally so you do not become get a case of 'tunnel vision' as I have.

[enlightedtrader]

	Quote:	brownsfan019
	This past week I've had a bit of a realization, in part to my interaction with james_gsx in the candlestick corner... what you pick for your chart timeframe is so incredibly vital that I think it's easy to overlook. Allow me to ramble... In my opinion, the lower the timeframe you go, the more focused on that specific chart(s) you become. For example, I recently had my ES chart down to a 2000 VBC. For those not familiar with the VBC, a 2000 setting can literally print candles in SECONDS. 2000 contracts traded in a quick moving market is nothing. It's actually quite amazing to take a step back and watch. To see what I mean, turn a 2000 VBC on during the first 30 minutes, the last 30 minutes or around econ news (esp Fed). My point being that I literally could only trade the ES at this level. It required my undivided attention. Now, that was/is not necessarily a bad thing; however, I soon realized that I really narrowed down my potential trading targets to one market. As some here might recall, I used to post about the EC (Euro Fx) and we had a thread about the CL (Crude Oil) going as well. Well, those markets became a distant past with a 2000 ES VBC Chart. So my question/dilemna as I think about my trading biz currently is: is focusing exclusively on the ES with a small timeframe (and many, many trades as a result) more or less advantageous for me vs. kicking up the timeframe on the ES to then open the doors to the other markets once again.... There's no quick and easy answer (at least for me right now). It's hard to complain when the ES is treating you well with your current setup; however, this is all about exploiting as many opportunities as possible while they are there. And if I am glued to the ES while the EC and/or CL are producing incredible trading opportunities, what is my cost? Again, not an easy answer and more rhetorical than anything. In the end, I wanted to get this out there so others could learn from my struggles currently to find that balance of exploiting the opportunities as they arise. In a perfect world, I could have a computer do all this for me, and before we go there, I am not interested in that. Whether it's old fashioned or what, I enjoy trading and doing it myself. That may be an opportunity cost that I have to deal with. So I would highly recommend that all traders, seasoned or new, to at least glance at other chart timeframes occasionally so you do not become get a case of 'tunnel vision' as I have.

An interesting thread indeed.

There is no doubt that the choice of time frame is very important. I've made a simple comparison between ES, QM, ZN, ZI, ZG, YM, ER2, NQ at lower time frames. What I've found is that ES offers the most trading opportunities than any other instruments. I'll be content to be an ES-only trader, at least currently.

Don't believe in my words blindly. The charts are there. You can easily find the answer. Really nothing is comparable with ES for scalpers/active daytraders in terms of the number of trading opportunities provided, IMO.

[brownsfan019]

enlightened - I will not argue the point that the ES is the best day-trading vehicle, as I agree!

BUT, if one can take advantage of many markets vs. being forced into one, I am giving a hard look at what is best in the long run. What I mean is, when the ES is in a junk day (however you define it) the ZN could be providing excellent opportunities. But if you are only looking at the ES, you'll never even notice the ZN trades.

Anyways, I think it's a valid point that all traders at some point need to consider. Is it better to look for opportunities over many markets, which will probably require a higher timeframe, or focus on a small number, as little as one knowing that some days that one will just not be providing much?

[brownsfan019]

I should have included in the original post that what timeframes you chose can also lead to a 'quality of life' discussion as well. What I mean is, when trading off a 15 or 30 minute chart, you have time to plan your trade out and implement when the time is right. You can take some time and strategize. It's a little easier mentally if you ask me, esp when you compare that to a chart that is printing candles every 20-30 seconds! Obviously there's a big difference there and that might be what the doctor ordered. It's a huge mental drain, for me at least, when taking 100+ trades per day manually. That will really wear you out some days. And then when I look at a 30 minute ES chart from today and see 4 nice trades, 3 winners, 1 small loser and a nice day of profits. Now, I may make more on a scalper method, but then it's a discussion of whether those few extra points were worth it in the end...

[enlightedtrader]

	Quote:	brownsfan019
	enlightened - I will not argue the point that the ES is the best day-trading vehicle, as I agree! BUT, if one can take advantage of many markets vs. being forced into one, I am giving a hard look at what is best in the long run. What I mean is, when the ES is in a junk day (however you define it) the ZN could be providing excellent opportunities. But if you are only looking at the ES, you'll never even notice the ZN trades. Anyways, I think it's a valid point that all traders at some point need to consider. Is it better to look for opportunities over many markets, which will probably require a higher timeframe, or focus on a small number, as little as one knowing that some days that one will just not be providing much?

I do agree sometimes other markets have large moves when ES is not doing too much.

However, the key word here is lower time frame. There is no junk day for ES at lower time frame. A good scalper/active daytrader can always find good trading opportunities at any market conditions. If not, that means the trader is not good enough and he/she needs to work on to make improvements.

In the end, there is a trade-off. To be focused on one market can help a trader to be very good at that particular market even though there are some opportunties missed in other markets. Since there are so many opportunties offered in ES, it really doesn't matter that much.

[enlightedtrader]

	Quote:	brownsfan019
	I should have included in the original post that what timeframes you chose can also lead to a 'quality of life' discussion as well. What I mean is, when trading off a 15 or 30 minute chart, you have time to plan your trade out and implement when the time is right. You can take some time and strategize. It's a little easier mentally if you ask me, esp when you compare that to a chart that is printing candles every 20-30 seconds! Obviously there's a big difference there and that might be what the doctor ordered. It's a huge mental drain, for me at least, when taking 100+ trades per day manually. That will really wear you out some days. And then when I look at a 30 minute ES chart from today and see 4 nice trades, 3 winners, 1 small loser and a nice day of profits. Now, I may make more on a scalper method, but then it's a discussion of whether those few extra points were worth it in the end...

The choice of time frame is also a choice of life-style for a trader, there is no doubt about it.

I prefer to use lower time frame. The reason is simple:

Only lower time frame can provide many trading opportunities at any market conditions. If you trade 15 or 5-min chart, there are a lot of junk days in ES. If you trade 50 tick chart, there is no junk day at all in ES.

[Nick1984]

I found that I had a similar problem, deciding what time frame to use. I had setups based on longer intraday swings off a 5 minute chart and I'd time entries off pivots and other key price levels using limit orders.

Then I started looking at 55 tick charts instead but they move so darn fast that I got whipsawed out of positions very often. For my scalping strategies I started to use 89 tick charts instead and found them much more comfortable. However I was still being whipsawed out of positions much to early. The transition to an 89 tick chart from a 55 tick chart didn't reduce the numbers of entries significantly but it did allow me to fine tune my entries better.

I found though that using an anchor chart (5 minute/233 tick) helped a lot more to keep me in the trade if there were obvious trending conditions in the longer time frame chart. I think having a good anchor chart is important as it helps alieviate the "tunnel vision" brown spoke of.

[BlowFish]

Absolutely vital. One of the fundamental bits of the trading plan is instrument to trade and time frame to focus on. (maybe with a higher time frame for context and a lower one to trigger entries).

Its one of the key things you have control over. Along with position sizing it has a direct impact on risk. (and of course potential reward). I think that's one of the reasons new traders and people with small accounts are attracted to ever smaller time frames. Of course the other key variable is position size but if you are trading 1 lot you cant go much smaller. Its tough they get forced down a particular path.

Many other considerations too (lifestyle as you mention...scalping 5 tick charts is demanding & tiring). Its a major decision and not to be taken lightly.

Cheers.

[brownsfan019]

	Quote:	BlowFish
	Absolutely vital. One of the fundamental bits of the trading plan is instrument to trade and time frame to focus on. (maybe with a higher time frame for context and a lower one to trigger entries).

BF - As much as I've read that comment in books, newsletters, etc. I never had any luck with that. What I mean is, I could have a gorgeous sell on the 30 min chart, but plenty of chances to go long on the 1 minute. What do you do? I just never had much luck with trying to use a higher timeframe for the overall 'feel' of the market and then using a quick timeframe for when to enter. It's probably a function of me using candlestick analysis as well.

[Nick1984]

How liberal are you with your definitions of your candlestick patterns on those really small time frames? In a fast moving market a 55 or 89 tick charts candles are pretty much worthless same with even a 2000v candle. A 1 minute candle can be relatively speaking, a much "longer" term candle than the candles mentioned previously as the candle has more time to form.