It is a visitor publish by Cory Mitchell, CMT of tradethatswing.com.
Day merchants could commerce on one timeframe or use a number of time frames. Which to make use of? Chart timeframe examples: 1, 5, 15, 30, 60-minute. Additionally tick charts (a set # of transactions). Smaller time frames (1 minute) give extra element. Longer time frames (15min), much less element, they’re smoother. 5 minute is extra within the center. One isn’t higher than one other. Relies on what you’re on the lookout for. These charts present the identical period of time, 11 hours of value motion, but look fairly totally different.
1-Minute: Extra motion, small cease loss, greater positions dimension, want extra leverage/capital to make it price it.
15-Minute: Fewer trades, greater cease loss (requires extra capital), smaller positions, not as hectic/quick paced.
Think about combining time frames. Discover a setup on an extended timeframe and drop to a decrease timeframe for precise entry and smaller cease loss.
- A triangle on a 60-minute chart is nearing the breakout level, for instance.
- Drop right down to 1-minute chart. Place cease loss beneath a latest swing low on 1-minute. This can probably be a lot nearer than the swing low on the 60min chart.
- Small cease loss means greater place dimension and greater revenue potential.
- Use a revenue goal from the 60-minute chart. This produces massive Reward:Threat trades. When the worth nears the goal, drop to the 1-minute chart and exit on a reversal to keep away from giving again a lot revenue.
Scan and look ahead to patterns on longer time frames. Small timeframe patterns come and go rapidly.
I exploit the 1-minute for day buying and selling. If I desire a greater perspective, I simply zoom out my chart (squish it).