What are Your Trading Timeframes and Why?

[bigverm23]

Is this only recommended for swing trades?

 

[Witstock]

I'm curious if I'm stupid or suicidal but I've been daytrading 1m charts with mediocre results. Backtesting I have about 90% profitability. However, in the real world I tend to make stupid mistakes like not following my strategy as to when to pull out thinking that something will come back and I lose my method EVERY single time. I've also found that momentum is not really taken into consideration with OnDemand nor are accepted bid-ask spreads when it comes to options factored properly.

That being said, I keep seeing that most of you have longer time frames implemented: anywhere from 5 minutes, 30 and on up. I know Mobius doesn't daytrade but takes longer approaches which is ironic given that I keep tweaking is code to suit my needs (whether it works is up for debate...)

1. So I'm wondering, am I just on a fool's errand with 1m timeframes and is it just not the wisest strategy?
2. What benefits do you find to trading longer periods and why?
3. Have you found bigger gains with longer timeframes?
4. To some degree, is it just a matter of less hassle?
5. Maybe you have a day job, this is just a hobby, or you don't want your spouse to kill you?
6. What negative experiences have you had with shorter or longer timeframes?

No offense to anyone, but I'd like to hear from others that have had a level of success over the years versus me (who may just occasionally get lucky or treads above water.) In other cases some people brag but all they really had to do is keep up with inflation and get lucky with a stock that ran. Maybe "success" in of itself is big ask as from what I heard day traders are a rarity when it comes to surviving in the field. Not trying to be patronizing at all, but I'm genuinely curious as to why some of you have chosen your time frames to work in and how it has worked out for some of you.

 

[mashume]

@Witstock
you wrote:

However, in the real world I tend to make stupid mistakes like not following my strategy as to when to pull out thinking that something will come back and I lose my method EVERY single time.

Before you go searching for magic time frames, get yourself a copy of "Trading in the Zone" by Mark Douglas. You can find it on Amazon or your local library as either print or audio book.

Take a week off from trading and read it. It will be difficult to do what he prescribes, but it will open your eyes even if you don't manage it.

Just my 2.8¢ (inflation)

-mashume

 

[Witstock]

Thank you. Will definitely do that.

 

[Witstock]

Talking with Mobius earlier. I mentioned I was daytrading earlier timeframes and interestingly enough he said he would instruct his students to use 2 min, 10 min, and 1 hour charts and also suggested only really using 2 indicators on each chart at most such as TMO and he pointed to this. He totally got my analysis paralysis reference. I'm usually on the 1m or ticks so I'm upping my timeframes I didn't want to bug the guy any further as I'm sure his time is valuable but I'm still trying to figure this out - my assumption is that it helps traders set their own rules so that they don't overstay their welcome.

Right now it's AH so I don't think it's behaving like it normally would. Perhaps it could be used on something like SPY which trades around the clock. I'll have to test it out at some point.

Not sure if this helps but since I'm not much of a coder, perhaps this is the least I can do is to share some words directly from him.

 

[zeek]

When i started daytrading years ago, i was totally hooked to the 1min timeframe, didn´t want to use anything higher because i was afraid of missing the moves but ironically i´ve realised that by using only 1min, i´ve missed even larger intraday moves that you will never see clearly on that timeframe but only on higher TFs. So i´ve gone from 1 to 2min, then 4min and now i trade mostly using only 10min but i always keep an eye on the 4min for timing entries if i scale into a position. Then for daily levels, i use the 4hour.

Less noise, much clearer to see the big picture and spot divergences with higher TFs IMO. But to each their own, i know a lot of guys trading only using the 1min so it really comes down to what you like and what works for you.

 

[Witstock]

thank you for your response.

I started 1 min charts daytrading back in 2009 but took a very long break from the stock market until the pandemic hit. Now with a lot of time (and I’m a long haul Covid case), I got back into the market once the lockdowns we’re first announced.

I developed a system on 1 minute charts that aces backtesting, but live seems to fall apart in part due to my own human error and that people trade different then tos algo math. it’s something that has potential so I’ll keep refining it until I toss in the towel.

I keep thinking (probably incorrectly) that 1m = surgical precision, but one thing is for certain is that 1m = anxiety and headache lol. So if you all tell me that you’re all doing much better or keeping your sanity in check and able to survive trading on a higher timeframes, then I’m 110% your next disciple following you to the ends of this earth. Ready, willing, and able.

 

[bigverm23]

When i started daytrading years ago, i was totally hooked to the 1min timeframe, didn´t want to use anything higher because i was afraid of missing the moves but ironically i´ve realised that by using only 1min, i´ve missed even larger intraday moves that you will never see clearly on that timeframe but only on higher TFs. So i´ve gone from 1 to 2min, then 4min and now i trade mostly using only 10min but i always keep an eye on the 4min for timing entries if i scale into a position. Then for daily levels, i use the 4hour.

Less noise, much clearer to see the big picture and spot divergences with higher TFs IMO. But to each their own, i know a lot of guys trading only using the 1min so it really comes down to what you like and what works for you.

so reading through this. I like the 1min charts because I'm working in a small account so to me personally (at least to this point), every dollar counts. I'm sitting here watching SPY on the 2 min and my call went from $10 in the profit to -$17 in the loss from one candle to the next. The 1 min seems simple to track every little move and if I want to jump out with that $10 profit, I easily can. What do you suggest regarding stop loss when working on the higher timeframes?

 

[bigverm23]

Talking with Mobius earlier. I mentioned I was daytrading earlier timeframes and interestingly enough he said he would instruct his students to use 2 min, 10 min, and 1 hour charts and also suggested only really using 2 indicators on each chart at most such as TMO and he pointed to this. He totally got my analysis paralysis reference. I'm usually on the 1m or ticks so I'm upping my timeframes I didn't want to bug the guy any further as I'm sure his time is valuable but I'm still trying to figure this out - my assumption is that it helps traders set their own rules so that they don't overstay their welcome.

Right now it's AH so I don't think it's behaving like it normally would. Perhaps it could be used on something like SPY which trades around the clock. I'll have to test it out at some point.

Not sure if this helps but since I'm not much of a coder, perhaps this is the least I can do is to share some words directly from him.

appreciate this. I'm going to keep experimenting with timeframes. One thing I found which has been pretty helpful is this RSM indicator https://usethinkscript.com/threads/rsm-indicator-for-thinkorswim.5407/ which literally plots multiple timeframes as labels and tells you if multiple timeframes selected align with the overall trend based on RSI/Stochastic/MACD. So although I may prefer to use 1min or 2min as my default, I can keep a close eye on the greater timeframes to keep me from jumping into, or out of, a contract too quickly.

https://imgur.com/a/zcsxCnZ

 

[QUIKTDR1]

It is my understanding that the majority of day traders utilize 5'or higher and only scalpers use 1'
In my opinion you have to find a timeframe that is suitable for your sentiment and ability to generate consistent profits within that time frame. But be aware there is more noise in lower time frames as well as your competing with algorithmic traders and other high frequency traders who have their equipment located in the exchanges. Therefore they are getting trades off quicker and are trading millions of shares of a percent of a cent.
It behooves you to recognize that environment and determine if an extended time frame could be more beneficial with less shares.
As far as stop loss placement it is very difficult to offer a generic formula that works all of the time because when trading you are dealing with multiple players who all believe they have their own "unique" formula or strategy. I have used a strategy based on 2:1 r:r and gotten stopped out an immeasurably amount of times, albeit small losses. Quite often proceeding the move that I envisioned.
Another method is utilizing ATR or ADR but this has to be coupled with a deciphering of the catalyst. Just sharing a few thoughts in order to help you with YOUR PERSONAL trading model. Trust yourself no-one cares in your success as much as YOU.

 

[Witstock]

. What do you suggest regarding stop loss when working on the higher timeframes?

Cant speak for him but I'm glad I'm using Trailing Stops. Lately I've been playing with options and not so much shares, so for my calculations I usually split the difference 1 strike up or down depending on where I think I might want to let it ride.

 

[Witstock]

appreciate this. I'm going to keep experimenting with timeframes. One thing I found which has been pretty helpful is this RSM indicator https://usethinkscript.com/threads/rsm-indicator-for-thinkorswim.5407/ which literally plots multiple timeframes as labels and tells you if multiple timeframes selected align with the overall trend based on RSI/Stochastic/MACD. So although I may prefer to use 1min or 2min as my default, I can keep a close eye on the greater timeframes to keep me from jumping into, or out of, a contract too quickly.

https://imgur.com/a/zcsxCnZ

I actually am keeping track using multiple TMOs overlaid now. Still refining my timeframes and just watching. Right now it's set to 2, 5, and 20. It's a WIP. the various timeframes act as a confirmation for me or a little added mental security blanket if the shorter timeframes are running opposite of where I want it to go - I'm assuming that's how others use them. From a stock perspective I think my setup would be profitable. From day trading options, I don't know how well the larger timeframes would work. A lot of options seems momentum and volume based so it doesn't translate so readily. As I might have mentioned before, I had around 90% success with my previous method involving options in OnDemand but it wasn't successful so far live. The market has been choppy and terrible recently so perhaps not the most opportune time to be trying these things live.

 

[michalg95]

10 min for trend, and 2 for entry!

 

[germanburrito]

it depends in your trading strategy, so for example if you are using levels or pivot points or something like channels you dont really need time fraemes, bcause as long as it hits your target on any level than is valid, but i like the 5 minute myself, thats my go to move, i can honestly see volume coming in at the end and beginning of a 5 minute candle. however for trnd i would say it changs because the rythm of things change, for example momths ago the spy was moving a certain way and you could se patterns on the 4 horuo chart now the rythm of the market chnaged and you will see the rythm on an 8 hour chart, this is just an idea tho. and also rememeber what is trending on one time frame it wont be trnending on another time frame.

 

[mashume]

TL;DR
Here's another perspective: Let the length of the time you want to be in a trade help guide your choice of timeframe.

Now the rest of the story...
Let me illustrate. I trade futures contracts mostly. Usually /MES, /MNQ, /M2K, and /MCL -- the small ones. I can scale positions that way and not be out of my depth.

I trade /MES on a 1250 tick chart, and /MNQ on 750, /M2K is on 250, and /MCL is on 100 ticks. That means that often in furious trading MES will generate between 2 and 10 candles per minute. That's OK with me. It also means that my average in-trade time is between 6 and 8 minutes. For /MNQ it's roughly the same. And for me that is key. I don't have the luxury of watching charts all day long (let alone globex hours) and so I developed a system that has many signals per day, and I'm often available to follow one to three of them per day. That's enough. My system is about 80% accurate a good day and 50% on a bad day and I scale relative to the current success rate. I don't care about the 'big move of the day' -- I gave up worrying about it a long time ago. Too many days I thought disparagingly that 'i'd missed the boat' and got frustrated.

The point of all of that is, if you plan on holding for months or years, days and weeks and such are good timeframes. If you want to be holding a position for 1 to 2 hours, find a chart time scale that gets you in and out reliably in that time frame (using your preferred signals / strategy). I have found something that works for me. It probably wouldn't work for anyone else and it took a long time to develop and grow comfortable with it -- signal fires, trade made, stop and target placed. done. simple and interruptible, as my life needs it to be.

Happy Trading,
-mashume

 

[jezzer46]

Honestly it depends on what you are trading. Futures, low float stocks, and scalping, lower time frames (1,5,15 minutes/ticks) are best suited as you are basically trying to get in and out within a small period of time. Options and swing trading require higher time frames because you want a clear picture of what price wants to do and the best way to do that is to zoom out.

For me personally I trade the daily candles using options for contracts that range from 1 week to 1 month in length. In my opinion the daily has the ability to be zoomed out far enough to where you can see the overall market flow yet not too far that you have to buy long duration contracts and hold (which to me is so hard to do because you are either sitting on unrealized profit or loss, and you have a decent chunk of money tied up) I also find that I dont have to be locked on to my computer for the trading day which has been something I have been trying to do for a while now.

Also while using the daily candles most of my trades are done relatively quick. 1 to 5 day holds for the most part plus the added benefit of not having a lot of time decay to the options which lessens my risk.

(LOL feels like im trying to upsell something, but I wanted to answer the question and not give advice)

 

[BrianE]

I use 2 years - 1 day, and 20 days - 15min. I don't show extended hours. I'm using it for swing trading a fees days to maybe a few weeks holding time.

My thoughts are that you can use whatever sub time you prefer (5 min, 15min, 1 day etc) and then you match the larger timeframe to a generally accepted larger frame.

What I mean by that is that you should do 1 day, 1 week, 1 month, 3 months, 6 months, 1 year, etc. But you have to account for weekends. So 5 days = 1 week not 7 days. 20 days is ~1 month.