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Trading In MICRO Timeframes

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SevenFX

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Hoping to learn more about trading by TIC, 1m, 2m or 5m, etc timeframes and whether any one of these timeframes has advantages over the other, apart from giving you more time to react...

I've just started trading the SPI200 index with 3pts spread and feel while the longer timeframes smooth out the noise, the gaps are greater.

Also TH mentioned to me on these CFD platforms there is no volume indication or order information, which disadvantage my trading ability, not to mention the 3pt spread.

Anyway like to hear how others trade these indexes and in what timframes.

Thanks Kindly
SevenFX
 
tek I see a lack of response,I'm sure it will come.
I'll give you my thoughts when I get a few minutes.
Pretty busy in my day job!
 
Hi

I’m predominately a day trader but do trade intra day as well, I use 1 min bars, have always gone for straight futures contracts, CFD, s and there spreads just don’t appeal plus Futures are exchange traded which I believe CFD, s are not.

If intra day trading then like any other form of trading a plan is a must, I don’t use technical to a great extent, more look for patterns as set-ups, also note daily pivots and areas of support/resistance were there has been allot of activity.

I only really trade the Spi in this way but will have a go at the Taiwan Index that trades in Singapore, its very liquid and only US$10 per tick.

Surprised none of the posters from the “Trading the Spi” thread have not commented?

Good luck.

Pager
 
Hi Pager.

Pager said:
have always gone for straight futures contracts, CFD, s and there spreads just don’t appeal plus Futures are exchange traded which I believe CFD, s are not.
Click to expand...

Sounds like their seems to be more confidence in straight future contracts as opposed than CFD's (assuming broker that trades direct into sfe platform)

I hear IB have a 10k opening acct fee...??? and no minis just straight $25 per contract.

Pager said:
I don’t use technical to a great extent, more look for patterns as set-ups, also note daily pivots and areas of support/resistance were there has been allot of activity.
Click to expand...

So where could I find different examples of pattern setups.....or how to I establish them if not to silly a question...????

Pager said:
I only really trade the Spi in this way but will have a go at the Taiwan Index that trades in Singapore, its very liquid and only US$10 per tick.
Click to expand...

Yes I've seen it's pretty fast n volitile, and think will stay away from it for now for me.

SevenFX
 
IB charge $5 per side for the Spi and it moves in $25 ticks, Data is free as are there charts (pretty basic though), and yes I think $10K is the minimum to open an account, same as most Futures brokers.

Try an internet search on pattern trading, also books by the likes of Larry William cover these types of topics, but really do your own research and watch the market.
Cheers

Pager
 
SevenFX,

If you are just starting out trading index futures, no intra-day timeframe will help you. It won't matter if you use 1m, 2m, 20, 30min 60min.

you need to learn to read a chart, you need to trade longs from lower opens from support and you need to trade shorts from higher opens from resistance, you need to define trends, and if possible always trade 2 lots.

You need exit strategies and plans. i.e if market moves 30-40 points I exit and don't trade again, and/or I hold my 2nd lot in EOD or overnight.


Intra-day timeframes are just noise.

Learn to chart-read, you'd be surprised how many use technical analysis but still can't chart read and resort to a plethora of intra-day price based indicators that always give false moves and lag price action, especially the shorter the timeframe.

Always identify support and resistance.

The market intra-day doesn't move in timeframe wave patterns, the market doesn't care about 5 minute charts or 10 min charts, and If you are trading with the spread of 3-4 points using CFD's, focus on bigger moves in the market or you're going to be slowly chewed and spewed.

Those who use intra-day timeframes have just been accustomed for many years using short-term timeframes so they feel naked if they don't have a 1 minute chart in front of them.

If you don't look at a intra-day chart and instead learn to 'feel' the market and chart read using higher timeframes, you'll go a long way in becoming a much better trader.

Profit will always come to those who have the ability to hold a winning position longer, but when you start trading 1minute charts you'll often end up exiting a position because of the noise factor.

Just my opinion.

Frank
 
Pager said:
IB charge $5 per side for the Spi and it moves in $25 ticks, Data is free as are there charts (pretty basic though), and yes I think $10K is the minimum to open an account, same as most Futures brokers.

Try an internet search on pattern trading, also books by the likes of Larry William cover these types of topics, but really do your own research and watch the market.
Cheers

Pager
Click to expand...

Thanks Pager will look into his book...

And beleive Amibroker5 has a IB data interface (DDE compatible) so might look at that unless find something better.
 
Frank D said:
SevenFX,

If you are just starting out trading index futures, no intra-day timeframe will help you. It won't matter if you use 1m, 2m, 20, 30min 60min.

you need to learn to read a chart, you need to trade longs from lower opens from support and you need to trade shorts from higher opens from resistance, you need to define trends, and if possible always trade 2 lots.

You need exit strategies and plans. i.e if market moves 30-40 points I exit and don't trade again, and/or I hold my 2nd lot in EOD or overnight.


Intra-day timeframes are just noise.

Learn to chart-read, you'd be surprised how many use technical analysis but still can't chart read and resort to a plethora of intra-day price based indicators that always give false moves and lag price action, especially the shorter the timeframe.

Always identify support and resistance.

The market intra-day doesn't move in timeframe wave patterns, the market doesn't care about 5 minute charts or 10 min charts, and If you are trading with the spread of 3-4 points using CFD's, focus on bigger moves in the market or you're going to be slowly chewed and spewed.

Those who use intra-day timeframes have just been accustomed for many years using short-term timeframes so they feel naked if they don't have a 1 minute chart in front of them.

If you don't look at a intra-day chart and instead learn to 'feel' the market and chart read using higher timeframes, you'll go a long way in becoming a much better trader.

Profit will always come to those who have the ability to hold a winning position longer, but when you start trading 1minute charts you'll often end up exiting a position because of the noise factor.

Just my opinion.

Frank
Click to expand...

Thats a great Post Frank.

Cheers

Pager
 
Thanks Frank..

Lotta valuable points in your post, as am experiencing some of what you said by overtrading on smaller timeframes.... not to mention the effort vs reward...

I feel reasonably confortable (but by no means "expert") with charthing, but mainly use channels, trendlines support & resistance based on intraday and previous days movements.

Also have been using pivots and notice they differ on different short timeframes, but find them a useful to ADD to confirmation....(though not a sure thing)

Also I appreciate what you mean by taking 2 contracts, and reducing risk/taking partial profit at certain points and holding balance incase of gap up/down.. well thats how I interupted it...???

Do you have a preference what time of day/night you open your positions, and is the position mainly driven by the US market...???

Thanks
SevenFX
 
Franks nailed a lot of points that need to be addressed.

I trade stock,but even so Franks points are very pertinent.

Cutting out noise is very important,you need to have a timeframe which is long enough to cut out the noise.
This will depend on the amount traded over a period.
For stock trading slow volume stock in smaller timeframes is pointless.
Some however can be traded like MGX which is being traded (Now daily) from a 60 min chart.(On "The Chartist Forum")
EGO which I'm trading in the "E" thread has lots of volume but very little range so anything under a 120 bar is pretty meaningless.Infact Id sugest its not one to trade using shorter term charts.

You need a timeframe where you can see clear technical patterns,support/resistance,Range and volume on each bar mean something.
I prefer 15 min charts for timing in well supported stock and 60 min charts once the stock has some profit.I'll even stretch that to daily if there is enough open profit in it and the daily analysis supports a trading plan in that timeframe.

Hope that is a bit of help.
 
If I use 5 min chart to day-trade SPI, are 5 point stop loss and 10 point trailing stop too narrow?
What do you advise?
 
To say one particular time frame or chart period should not be used is just plain wrong.

What are you saying? Think about it. What I see is the only way? That people who scalp off the DOM or 1 minute charts are getting lucky off noise??

Input from others can be helpful but should never be taken as the only way. I think a big reason this game is so hard to learn is that newbies try and imitate a type of system that doesn't suit there personality.

A hell of a lot of what I trade are SPI scalps off the 1 minute chart. I will take profit seconds to minutes later at the target of around 4 to 10 ticks with a 4 tick stop loss. I can do this if the day is suited to that style up to 20 times a day or more with a very high success rate. When I'm on song I can take many times the days range, far more than someone looking for an all day move. At times I'm kicking myself when it continues to run and I have already taken my profits like today. But after many years of trying to copy other peoples "system" I have found the one that suits my head and am now taking money out of the market consistently.

For me the ultimate trading system has two parts.
1. A positive expectancy after brokerage and slippage.
2. Produces many trading signals so as to exploit to the maximum your capital

What is one persons noise is another's persons path to riches.
 
jj1929 said:
If I use 5 min chart to day-trade SPI, are 5 point stop loss and 10 point trailing stop too narrow?
What do you advise?
Click to expand...
Think it's irrelevant what time frame you are using, it's more important deciding stop strategy for the trading strategy you are using.

If you are selling/ buying off support and resistance, 5 points is probably ok as you want immediate validation/ confirmation. However, if you are trading fades or intra day trends, it's probably going to stop you out of otherwise good trades.

I'm just learning all this stuff myself, but you have to be on the ball when it comes to futures...
 
tech/a said:
Franks nailed a lot of points that need to be addressed.

I trade stock,but even so Franks points are very pertinent.

Cutting out noise is very important,you need to have a timeframe which is long enough to cut out the noise.
This will depend on the amount traded over a period.
For stock trading slow volume stock in smaller timeframes is pointless.
Some however can be traded like MGX which is being traded (Now daily) from a 60 min chart.(On "The Chartist Forum")
EGO which I'm trading in the "E" thread has lots of volume but very little range so anything under a 120 bar is pretty meaningless.Infact Id sugest its not one to trade using shorter term charts.

You need a timeframe where you can see clear technical patterns,support/resistance,Range and volume on each bar mean something.
I prefer 15 min charts for timing in well supported stock and 60 min charts once the stock has some profit.I'll even stretch that to daily if there is enough open profit in it and the daily analysis supports a trading plan in that timeframe.

Hope that is a bit of help.
Click to expand...


In reply to T/H's comments I'll pre empt my post above with.

I have found.
For myself.
Others may find something completely different.
 
I have been practising short term trading with a small account with IG Markets.
It is a really interesting exercise, keeps you on your toes.
At the moment I am trading a 5 minute chart of the ftse100, up just over 40 pts after 2 shorts and 1 long.
Am currently out after calculating an exit at 6272 based on the last run up x 0.618 placed below the previous low.

I think this should be essential training and I am sorry I havent done it before.

Mike

ftse100.jpg
[/IMG]
 
trembling Hand said:
To say one particular time frame or chart period should not be used is just plain wrong.

What are you saying? Think about it. What I see is the only way? That people who scalp off the DOM or 1 minute charts are getting lucky off noise??

Input from others can be helpful but should never be taken as the only way. I think a big reason this game is so hard to learn is that newbies try and imitate a type of system that doesn't suit there personality.

A hell of a lot of what I trade are SPI scalps off the 1 minute chart. I will take profit seconds to minutes later at the target of around 4 to 10 ticks with a 4 tick stop loss. I can do this if the day is suited to that style up to 20 times a day or more with a very high success rate. When I'm on song I can take many times the days range, far more than someone looking for an all day move. At times I'm kicking myself when it continues to run and I have already taken my profits like today. But after many years of trying to copy other peoples "system" I have found the one that suits my head and am now taking money out of the market consistently.

For me the ultimate trading system has two parts.
1. A positive expectancy after brokerage and slippage.
2. Produces many trading signals so as to exploit to the maximum your capital

What is one persons noise is another's persons path to riches.
Click to expand...
Great points there TH. Very True.
 
Trembling Hand,

Don’t take my words out of context, and have a look at the original question from SevenFX…


Hoping to learn more about trading by TIC, 1m, 2m or 5m, etc timeframes and whether any one of these timeframes has advantages over the other, apart from giving you more time to react...

So the guy is going to spend the next few months tracking those 3 timeframes intra-day to see which one is best. That is a waste of time, it won’t make on difference which one he tracks, and for F sake he is trading a 4-point spread on CFD’s. Take my word for it, he’ll go broke if he doesn’t learn about what is happening in the bigger picture.

It’s not about you trading 1 minutes charts, if you think 1 minute charts are worth it, then teach him how to trade 1 minute tick charts.

It’s not about me, you or tech A, or Wayne L, it’s about SevenFX and steering him in the right direction.

Frank
 
I’m confused here….

We have tekmann trading futures on CFDs with a spread of 3-4 points. (original question)

But we have Trembling Hand that trades the SPI using a 4-10 point exit rule and a 4 point stop.

Using my math, I would say SevenFX will go broke using this method, I’m not sure if others agree, but I would think this would be the case.

So instead of generalizing this entire topic, I would be extremely interested and I’m sure tekmann would also be interested in seeing a 1 minute chart using your method, so that he can then make a conclusion of whether trading a ‘scaplers’ way will suit him, or will it be more beneficial to trade larger trends whilst he is trading CFD’s.

We still don't know SevenFX's personaility, only he can make up his mind which one will suit him.

A simple chart and explanation of how you’re trading style can beat the ATR of the SPI. Let’s use a lower ATR of the SPI of around 60 points. (ATR is currently around 90 points)

Frank
 
Frank D said:
I’m confused here….

We have tekmann trading futures on CFDs with a spread of 3-4 points. (original question)

But we have Trembling Hand that trades the SPI using a 4-10 point exit rule and a 4 point stop.

Using my math, I would say SevenFX will go broke using this method, I’m not sure if others agree, but I would think this would be the case.

So instead of generalizing this entire topic, I would be extremely interested and I’m sure tekmann would also be interested in seeing a 1 minute chart using your method, so that he can then make a conclusion of whether trading a ‘scaplers’ way will suit him, or will it be more beneficial to trade larger trends whilst he is trading CFD’s.

We still don't know SevenFX's personaility, only he can make up his mind which one will suit him.

A simple chart and explanation of how you’re trading style can beat the ATR of the SPI. Let’s use a lower ATR of the SPI of around 60 points. (ATR is currently around 90 points)

Frank
Click to expand...

Frank I have already told SevenFX to give away CFDs for anything other than longer time frames. My dislike for CFDs is very well documented especially the Index CFDs. Like here on my blog,http://tremblinghandtrader.typepad.com/trembling_hand_trader/2007/06/the_real_cost_o.html. I agree that general ability to read larger time frames is useful but its not for everyone. And yes CFDs will cut you to pieces trying to get over that spread. it simply can not be traded on shorter time frames.

My point is that if you are continually draw to a certain type of trading or find a technique attractive that you should pursue it until you find out it works for you or is rubbish. The only thing that I have found common that runs through all successful traders is not a certain trading approach or application but a perfect match between markets, time frame and challenge to stimulate and capture that persons undivided attention until they have the skill to make money. If you are trying to imitate what someone else does there is a high chance that if your personality doesn't gel with that technique you will become doubtful and disillusioned and fail.

Frank, I have spoken to tekmann and sent him some charts before this thread started and I can tell you that we do agree. That micro trading with CFDs cannot be done. My sugestion to tekmann was to give away cfds and try the SPI.
 
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