Best Time Frame for Trading For ThinkOrSwim?

[useThinkScript]

The below posts will explain how to find your Three timeframes required for stock analysis.

Why are three timeframes necessary?

1. Trend must ALWAYs be reviewed on the higher and lower of your three timeframes.
This stacks the deck in your favor.
The trend that you see on the lowest of your timeframes confirms price has the momentum to move up.
The trend that you see on the highest of your timeframes confirms that price has the strength to continue to move up.

2. Your middle chart is your trading chart, where you look for your signals.
It is where you analyze the pullback.
Think about it. If the pullback has just occurred there is NO new trend yet, to be observed.
So trend indicators are not used on this timeframe.

On your lower timeframe, you want to see an oscillator/trend to be all bullish.
Where price has found support.
And confirmation that the pullback has reversed.

You want to verify that your entry has support and is not hitting resistance on your lower and middle timeframes, as determined by your drawn support and resistance zones.
https://usethinkscript.com/threads/support-resistance-your-trade’s-make-or-break.20534/

Review that your trade is in the same direction as the market and the market has trend

Review that your highest timeframe is showing higher highs and higher lows, which will support your trade's retracement
https://usethinkscript.com/threads/the-vip-linear-regression-channel.20522/

Trend and support are your catalysts (unless you have some other exterior catalysts)
https://usethinkscript.com/threads/must-know-market-drivers-catalysts.20243/
Perceived false signals only occur when trend and support are not present.

Lack the real estate to do 3-timeframe analysis?
VIP has the answer:
https://usethinkscript.com/threads/stacked-charts-nested-behind-each-other.18186/


Mandatory Reads:
https://usethinkscript.com/threads/how-to-read-an-oscillator-in-thinkorswim.11497/
https://usethinkscript.com/threads/lagging-indicator-accuracy-in-thinkorswim.15624/

 

[MerryDay]

Never trade off just one timeframe. That’s like driving blindfolded—bad idea.
Different aggregations give you the full story. More timeframes = better decisions = higher success rate.

Look at this 10-min chart. Gorgeous, right? Every one of your buy signals would for sure be flashing "BUY NOW!"

Do you go all in?

HECK NO!
Look at the higher timeframe?
This stock hasn’t moved much in 6+ months. Thinking it’ll suddenly take off just because you bought? That’s wishful thinking, not trading.

Moral of the story?
ALWAYS check all three of your timeframes.

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read more:​

https://usethinkscript.com/threads/best-time-frame-for-trading-for-thinkorswim.12209/#post-131229​

VIP:​

https://usethinkscript.com/threads/the-vip-linear-regression-channel.20522/#post-150636​

https://usethinkscript.com/threads/automated-trend-line-drawing.18181/#post-139275​

https://usethinkscript.com/threads/automated-trend-line-drawing.18181/#post-139310​

​

Pretty charts can be very deceiving.​

read more:​

https://usethinkscript.com/threads/why-slope-and-angles-are-not-reliable-in-thinkorswim.20303/​

​

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Hope This Helps

 

[MerryDay]

New traders start out with an attraction to the lower timeframes.
They think, they will "miss out" if they do their analysis on anything higher than a 5min chart.

They are smart enough to see the issues and noise associated with trading on lower timeframes. They want the cleaner, clearer signals that higher timeframe signals provide, but their mindset is stuck on the scalper's aggregations.

The market is a tough taskmaster. To succeed. traders make a choice. They either accept that they are scalpers which means eschewing most of the indicators on this forum; in favor of pure price action.

Or they embraced their technical chartists leanings;
They create good basic strategies on their three timeframes.
1. They verify their long-term trend on their highest timeframe.
2. Then do their in-depth chart analysis with at least THREE non-collinear indicators on their trading chart which is their middle timeframe.
3. And only then, start looking at their lowest timeframe for entry using price action.

If you are having difficulty having consistent profitable trades, make sure that you are doing your analysis starting at your highest timeframe and working down to your lowest. Not the other way around.

 

[MerryDay]

Traditional stock trading theory is to trade on THREE timeframes

Why you ask? Read more here:
https://www.babypips.com/learn/forex/time-frame-mashup
What time frames should I choose:
https://www.babypips.com/learn/forex/time-frame-combinations
https://www.babypips.com/learn/forex/summary-of-multiple-time-frame-analysis

Need more?
https://tradeciety.com/how-to-perform-a-multiple-time-frame-analysis/

NO! You cannot substitute MTF indicators in place of reviewing your three charts!

Your higher and lower timeframes need to be reviewed, in order to verify the macro and microtrends are in place.

 

[MerryDay]

How Different Types of Traders Use The Forum To Trade Successfully

The forum applies the label:
Swing trader to those, who do not use interday charts.
Swing trading is more about research not about buy arrows.
Forum scripts to start with include: financials, fundamentals, market news direction, investor sentiment...

"Scalper" is anyone whose 'main' charts are on timeframes of 5min and less.
While, many of the forum's technical indicators do not apply to timeframes of 5min and less.
Here is a scalper's toolbox to get you started: price action, tape reading, candle patterns
Profitable scalpers:

1. Measure their trades in minutes. Short-lived trades reduce risk exposure. Quick closure minimizes losses.
2. Make a high volume of frequent trades, thus capitalizing on small price movements, especially in volatile markets.
3. Only trade extremely liquid instruments such as futures/ETFs/Market Maker Stocks

Daytrader is anyone that doesn't fit the above two groups.
Daytraders start with creating a chart with three non-collinear studies to build their basic strategy which is reviewed on 3 timeframes

Read completely through https://usethinkscript.com/threads/automated-trend-line-drawing.18181/ and click on the included links to understand the basics:

The essence of profitable short-term trading is giving 100% attention to these scripts: market direction, fundamental news, and investor sentiment ; as well as news events such as: economic data and announcement dates, geopolitical events.
VIP members can read more here: https://usethinkscript.com/threads/good-day-vs-bad-day-in-thinkorswim.17236/
These will provide direction as to when to hold 'em and when to fold 'em.

Making a livelihood in daytrading is not difficult, as long as one reduces the impact of emotional trading by setting a predetermined exit plan with a stop loss. Thus eliminating impulsive decisions and limiting losses to allow you to live to trade another day.
Review these Exiting A Trade threads

New traders are driven to trade. It takes patience to wait.
Review the market breathe and internal threads to ensure, you are on the right-side of the market before making trade entry.

Always be aware of market news and events. Use trustworthy sources! The talking heads and social media are more into shock and awe headlines that tend to be wrong more often than right and lack any substantive depth.
Accessing up-to-the-minute market driver news has a huge effect on your profit.
ToS has: Trader TV, live news, UseTheNews and Visualize Heatmap. Also, your portfolio news from the bottom of your monitor tab.

Common mistakes:
Daytraders attempting to trade on scalper timeframes.
Don't do it! The noise and the chaos of these lowest timeframes wipe out profits!
Make sure that you are doing your analysis starting at your highest timeframe and work down to your lowest. Not the other way around.

Daytraders attempting to swing because they have full-time jobs and other obligations.
But daytrading and swinging are worlds apart. Swing trades must have the financials, fundamentals, market news direction, investor sentiment required to sustain the trendline. Just a great chart / strategy won't cut it.

Swingers attempting to daytrade. Be aware that these two types of trading are worlds apart.
Swing trades, simply need a great stock and a strong bullish market.
Daytrader's focus is on price action, candle patterns, and a high volume of trades, in order to ride short but strong momentum moves.

70% of retail traders fail due to lack of knowledge. The forum was created to ensure ToS traders succeed.
All questions are welcome.
By sharing your thoughts and questions, you'll not only learn from others, but you'll also be helping others learn as well.

 

[taoriver]

MerryDay, kilo-kudos for all you (Ben-Ten too) (so generously) give to this site. You definitely are first in the flamboyance ... I think it's about time I figured out how to make the best use of this invaluable resource. This thread is a great place to start! Have a terrific twenty-four and stay well. Cheers

 

[hboogie]

Which indicators in a similar vein are not lagging indicators? I'd be curious to see what the difference is real-time.

That being said, I have been a fan and user of varied implementations of what i would describe is an atr trail stop (such as this) -- UT Bot, supertrend, PSAR, LNL ATR, et al, and I've found this one to be great so far. I don't notice a lag and i'm using it on a 5m, sometimes a 3m. Perhaps its just my approach, but being discretionary I use levels to engage and this indicator quickly determines trend and potential stop placement.

I’m not new to the game. Still working on my process and always looking for ways that can help me fine tune my edge. Such as this indicator.

I was remarking simply on the fact that if this is a lagging indicator, which indicators out there are not considered lagging so I can see the difference.

I don’t mind the lag presented on the time frame I execute on. I monitor multiple HTF’s real-time but when intraday trading I execute on a lower timeframe and have been sampling with this indicator and so far so good.

Just curious on a technical level to see what a non-lagging indicator looks like. That’s all.

 

[useThinkScript]

Scalpers trading on timeframes of 5-min and lower; do not use trend or range indicators at all.
They do not use most of the indicators on this forum, as most have some lag, which is eschewed by profitable scalpers.
They use price action to make small, frequent trades.
Learn more:
https://usethinkscript.com/threads/best-time-frame-for-trading-for-thinkorswim.12209/#post-131229
https://usethinkscript.com/threads/best-time-frame-for-trading-for-thinkorswim.12209/#:~:text=reading, candle patterns-,Profitable,-scalpers:

Daytraders do use trend and range studies. But they must be used for what they are written for.
Ranges and trend indicators are used to identify range and trend on your higher and lower timeframes
as explained here:
https://usethinkscript.com/threads/best-time-frame-for-trading-for-thinkorswim.12209/

No, trend and range indicators are not optimized to find entry signals on your trading chart (middle timeframe)
Daytraders look for

1. the trend / range indicator to have reversed on the lowest timeframe. Confirming the change of direction.
2. For the trend /range indicator to continue on their highest timeframe. Ensuring the trade will retrace.
3. And look for their strategy (such as your UBOT or PSAR or other reversal studies) to signal on their middle-timeframe
4. only if their price has found support
5. and only when the trade is in the same direction as the market indices.

@antwerks

 

[useThinkScript]

Just curious on a technical level to see what a non-lagging indicator looks like. That’s all.

Here is a scalper's toolbox to get you started on no-lag chart analysis: price action, tape reading, candle patterns

 

[hboogie]

Thanks!!!

It looks like only one item contains a link. Not sure if that’s intentional.

 

[MerryDay]

Thanks!!!

It looks like only one item contains a link. Not sure if that’s intentional.

All the no-lag price action tools are listed here
https://usethinkscript.com/threads/price-action-toolbox-for-thinkorswim.10747/