Charting time frames and the value (or lack of value) of different time frames

Charting time frames and the value (or lack of value) of different time frames

Charting periods and chart types, what works and what does not.

There is only one real time frame to work with and that is “tick” charts. Any other value is a modified perception from this raw real data.

Over the years, I have read and tested all the different theories and writings on the different time frames people use for trading. I find it amusing that traders still think there is a holy grail of time frame, and that they are “to close” to the market or a general comment is “if I look at the 15min chart it provides me with better profit or better trends etc”. All this is absolute hogwash, and all a trader is doing here is trying to model and fit a chart time-frame to suit the outcome the trader is chasing. This is a sure way to implode ones trading account.

What must be worked on is that at the end of the day a traders strategy must work on any time frame, otherwise a trader is chasing a perception and trying to create reality. This is called curve fitting.

My opinion is this. I do use various forms of tick data in various ranges of time, from 4 minute to 15minute to hourly or daily etc. However, I build my strategies and trading systems not on time- frame but rather focus only on the strategy. I can place any of my strategies on any time- frame and the results will be the same. 

That is the point. I only use time-frames to condense data and make my analysis more manageable. Do not focus on time-frames and people’s or educators perception of time frames but rather focus on creating a profitable trading system, and it will automatically work on any application of time value. Focus on what you the trader can control, and that is your strategy. Basing your strategy on time frames means you are hoping you have the correct time-frame otherwise your strategy will not work. Trading is hard enough, so why worry about that as well….. Think about it. 

Why is this? Well because a trader needs to focus on the application of their strategy and that if the price rises or falls it is only a movement in price and regardless of what time frame, that movement in price is always the same. This is why if you are going to base any strategy off any time frame the only relevant time frame is raw tick data, not second data, but trade direct live tick data that only moves when buyers meet sellers.

So if you are trading:

• ·        4 minute charts and using time by degrees, where every 4 minutes equals one degree, or

• ·        5 minute charts, or
• ·        15 minute charts, or
• ·        60 minute charts, or
• ·        4 hourly charts, or
• ·        Daily charts,
• ·        Renko Bars

Always ask yourself, would my strategy work on any time-frame or am I modelling and curve fitting to suit a time frame.

Trade your strategy do not trade the time frame.