How to use the many things posted on this blog together...
Pairing up different time frames on a multiple monitor trade station layout
allows you to very easily scan them all at a glance...
View relatively long term, mid term and very short term charts.
TIME FRAMES & FREQUENCY
Time based charts -
Daily, 30 minute, 15 minute, 5 minute, 1 minute etc.
Time frames describe how much market action is displayed on any chart.
For example...a 6 month daily will show ~180 daily bars spanning 6 months
Frequency describes the length of time represented by each bar on a chart.
TICK based charts -
2500 ticks-per-bar, 500 tick, 100 tick, 60 tick etc.
The above definition is a little different for tick charts...they do not use Time in their rendering.
TICK charts use a set number of trades (ticks) to determine when the next new bar will print.
A 120 tick shows any number of bars and each bar is made up of 120 trades per bar
The shorter the time frame, the more often trades happen
I advocate taking small bits and pieces out of the markets rather than trying to call the "big move".
I watch very short term charts so as to enable as many trade opportunities as possible
to print on the charts. The shorter the time frame and frequencies you chart
the more often that excellent actionable trades are presented.
The following series of charts shows how I suggest you can use
multiple charts to enhance the probabilities of successful REVERSAL calls.
5 differing 'Time Frame' chart sets are posted below.
Time based charts -
Daily, 30 minute, 15 minute, 5 minute, 1 minute etc.
Time frames describe how much market action is displayed on any chart.
For example...a 6 month daily will show ~180 daily bars spanning 6 months
Frequency describes the length of time represented by each bar on a chart.
TICK based charts -
2500 ticks-per-bar, 500 tick, 100 tick, 60 tick etc.
The above definition is a little different for tick charts...they do not use Time in their rendering.
TICK charts use a set number of trades (ticks) to determine when the next new bar will print.
A 120 tick shows any number of bars and each bar is made up of 120 trades per bar
The shorter the time frame, the more often trades happen
I advocate taking small bits and pieces out of the markets rather than trying to call the "big move".
I watch very short term charts so as to enable as many trade opportunities as possible
to print on the charts. The shorter the time frame and frequencies you chart
the more often that excellent actionable trades are presented.
The following series of charts shows how I suggest you can use
multiple charts to enhance the probabilities of successful REVERSAL calls.
5 differing 'Time Frame' chart sets are posted below.
This 1st set shows very short term time frames. These are "Trade Mode" entry charts.
Take note of prices and indicator positions at the vertical blue lines. The arrow
on the left hand chart signifies the level that the entry order was placed.
Take note of prices and indicator positions at the vertical blue lines. The arrow
on the left hand chart signifies the level that the entry order was placed.
Other than the oversold stochastic lines, there were conflicting signals between the time frames...
IE: the MACD EMAs were declining and the histograms did not have divergence-to-price.
A price reversal is not always accompanied by "good" or positive indicator signals.
IE: the MACD EMAs were declining and the histograms did not have divergence-to-price.
A price reversal is not always accompanied by "good" or positive indicator signals.
But very often, indicators can help you to see potential reversals --
as they are happening or before they happen.
Next we have short term time frames. The right hand chart shows the entry arrow, at the same
level as in the left hand chart above. The stochastic lines are both heading to the oversold area
and the MACD EMAs are sloping positively. The blue vertical lines are placed
where the histograms clearly displayed divergence-to-price.
Divergences mark the bottom and trend lines suggest a breakout in process.
These next sets are what I consider "intermediate" time frames. Again the blue vertical lines
are placed at the bottoms where the histograms clearly show the divergence-to-price.
Although the left hand time frame is not, the RH is showing MACD EMAs positive slope
at the entry arrow but they are not doing so at the actual blue line bottom.
Stochastic is heading downward and are soon to "hook". The combination of
positive slope MACD EMAs and STO describe an MT SLING indicator pattern
as shown at the entry arrow on the right hand chart.
Now come the minute based time frames...The blue vertical lines are placed approximately
at the entry level...the yellow arrows are placed where there are "hints" of a possible price reversal
IE: the long lower candlestick tails and stochastic being in the oversold area.
Also, the right hand 5 minute chart is displaying stochastic divergence-to-price
but there are no MACD histo or EMA divergences.
Combine multiple time frames on your layout...
Doing so gives you better perspective before taking trades. The longer term time frames
give you a "stronger" perspective of what may soon happen with price.
The shorter term time frames tell you "when" to enter your orders.
Study the pairs of charts below...they were "snapped" at the same time.
Compare the relationships as price made a new low to what the indicators were telling you.
REVERSALS RULE !
Look for REVERSAL SIGNALS using all time frames.
There will never be 100% complete agreement across them all
nor will the signals tell you how much of a reversal to expect.
But more often than not they will serve you well.
