[Dogpile]

<<why wouldn't you use the trend in the daily chart to increase your trade size when price moves in that direction in the lower timeframe charts (i.e., the one you trade off)? >>

I guess what I was trying to say but didn't come out and say was --- I have a slight bias towards fading any trend that develops on a daily chart. I don't believe in sustainable trends on the daily chart -- I believe in choppy daily action...

Now, don't get me wrong -- I DO believe in trends on intraday charts so I will take full size for an intraday trade even if it lines up with a daily trend --- having said that I want to fade the daily trend. So effectively, the daily just has no bearing on my trading.

<<how do the weekly charts affect your trade decisions? >>

they don't currently. But when stepping out to this timeframe -- the indicators seem to want to speak to me. always playing around -- check this one out (buy weekly macd histogram upturn that occurs during traditional seasonal strength for second half rally --- sell Jan 31st):

http://bp1.blogger.com/_5h-SWVGx6Ms/...sonal+MACD.bmp

[Anonymous]

Originally Posted by Dogpile »

<<why wouldn't you use the trend in the daily chart to increase your trade size when price moves in that direction in the lower timeframe charts (i.e., the one you trade off)? >> ..........

Suppose I trade 3 contracts on a trade if it is in tune with the daily chart. That is, for example, the daily trend is up so I trade 3 contracts when going long. On a short signal I only trade 1.

1. Subconsciously I have told myself to trust my long signals 3 x's as much as my shorts. Conversely, I have told myself to distrust my short signals in such a way as to trade 1/3 the position.

2. If I am 1/3 less confident in my short signals, why am I taking them at all? If I believed it to be a good trade, then it should not be relocated to a lesser position size. Hence I have already added a negative bias to my trading and a self-fulfilling prophecy.

3. If you can't trade with the same size on both signals, why trade the lesser one? You are setting up a hierarchy for trade signals. But why trade anything less than the top of the ladder? Need more trades, or more money? TRADE MORE MARKETS. And trade them only in the direction of the trend.

This is the problem, form my point of view with using a daily chart to trade smaller timeframe intra-day. If you believe that trend is one of the small edges afforded the retail trader, it makes little sense to go short when the daily trend is clearly up.

But we know that an up trend can have down days. It can have down weeks for that matter. It takes away ones ability to make money if he is only trading on the side of the daily trend. Movement is important and that movement can be counter to the larger daily trend and still be tradable.

I prefer to keep my trend-frame small: 15 mins. and my trade-frame smaller: 5mins. I can thus trade counter to the larger daily trend, while still acknowledging the power of trends and fractal market structure.

As for the daily chart, its use in intra-day trading should be confined to support/resistance levels.

[ant]

Originally Posted by PivotProfiler »

Suppose I trade 3 contracts on a trade if it is in tune with the daily chart. That is, for example, the daily trend is up so I trade 3 contracts when going long. On a short signal I only trade 1.

1. Subconsciously I have told myself to trust my long signals 3 x's as much as my shorts. Conversely, I have told myself to distrust my short signals in such a way as to trade 1/3 the position.

2. If I am 1/3 less confident in my short signals, why am I taking them at all? If I believed it to be a good trade, then it should not be relocated to a lesser position size. Hence I have already added a negative bias to my trading and a self-fulfilling prophecy.

3. If you can't trade with the same size on both signals, why trade the lesser one? You are setting up a hierarchy for trade signals. But why trade anything less than the top of the ladder? Need more trades, or more money? TRADE MORE MARKETS. And trade them only in the direction of the trend.

This is the problem, form my point of view with using a daily chart to trade smaller timeframe intra-day. If you believe that trend is one of the small edges afforded the retail trader, it makes little sense to go short when the daily trend is clearly up.

But we know that an up trend can have down days. It can have down weeks for that matter. It takes away ones ability to make money if he is only trading on the side of the daily trend. Movement is important and that movement can be counter to the larger daily trend and still be tradable.

I prefer to keep my trend-frame small: 15 mins. and my trade-frame smaller: 5mins. I can thus trade counter to the larger daily trend, while still acknowledging the power of trends and fractal market structure.

As for the daily chart, its use in intra-day trading should be confined to support/resistance levels.

Aligning trades using multiple timeframes increases the probability of a trade versus taking a scalp trade that may be based on a single timeframe only. Why would I take a scalp trade or a less probability trade? Because based on research, the scalp trade may still have an edge, but it may not be as high as a trade that is taken with the longer timeframe trend. So I adjust trade size to compensate. For example, I would expect more profits from a trend day down that is with the longer term trend than a trend day down that is against the longer term trend. Anytime trade conditions and a trader's odds improve, whether it is by using multiple timeframes or because of increasing market volatility, for example, I will step up the leverage in my trading. I believe that knowing when to use more leverage is an important skill used by professional traders. It's sort of like doubling down in Blackjack when the odds are more in your favor. During the month of August, I definitely increased my trade size in general because of increased volatility. Increased volatility generates more profitable trades for me so I acted accordingly. I increased trade size within my risk parameters. I'm glad I did because August was my most profitable month this year thus far. I definitely operate from the point of view that most of my profits come from a few trades. How you use the daily charts is dependent on your trade plan, my point was that using the daily chart is usually advantageous, unless you are a scalp trader that only uses order flow. I use the daily charts to determine short-term to intermediate-term market condition and for support/resistance levels. But there are many other ways that it can be used profitably. For example, Dogpile uses the daily charts with the Taylor Technique. To each his own. There is no right or wrong way here. My point was that for most traders, the daily chart should be consulted.