Hi Simba,
I'm not gonna say that I don't agree with you because that would be the same as saying you are wrong.....so I only would like to give my point of vieuw on this one....
If one takes severall time frames then the bigger time frame is going to over rule the smaller ones. Meaning one can only trade if the biggest TF is in place.
That is so called a good aproach when price is in a trend and that one would only trade according that trend. Wich will filter out some of the false trades.
But it has immediatly a disadvantge that one will miss out some of the smaller moves that would also lead to profit if one would have looked only to the smallest TF and that still would represent trend on that smaller TF.
The 1H TF can be in a down trend but if one would look to a 5min one can easely see moves of 50pips up even if that 1H is in a downtrend.
One will also miss out on all the reversals of trend that would lead on the smaller TF's to nice profits. But one needs to wait till the biggest TF showed also that reversal and that will lead to missing out nice potential profits.
Firm and reliable tops and bottom show a very strong movement. If a reliable top is made price has the tendency to shoot of strongely the opposite way.
The smaller TF would catch that move where if you need to wait till the biggest TF confirms then one looses a part of that potential.
If one arives in a ranging market that would have the biggest effect on the biggest TF then one will feel he can only start to trade when that biggest TF is in place and that he will buy on tops and sell on bottoms.
The easiest way to see this and understand this priciple is by placing MA's that represent each TF on the smallest TF.
Even that one would not use MA's but only to understand and see it visually.
Lets say that one would use a 25MA on the 5min. You place also the 150MA on that 5min TF that would represent the 25MA on the 30min. and a 300MA who would represent the 25MA on the 1H TF.
If price is in a real nice trend for ex. down trend then there is no problem on the contrary the 300MA will show down all the way and if one trades on the smaller MA's coming into place to the down side that will give nice entrys after the price retraced up on the big TF and is comming back down.
But the serious problem starts when one gets in a sort of a range where the 300MA gets in place to go long and on that moment the move is finshed and vice versa and this over longer period of time.
Emotionaly you gonna suffer on this because one would see that if one would have trades solely on that 5min TF, one would still make profits. But combined with that biggest TF one feels that he misses out on all the profits that were possible to take and only gets the losses. Or that one can enter at the end of the moves. Wich leads to quite some frustrations and blaming it on other TF's.
And frustration is what we need to avoid at all cost in trading.
So personally I depend more on making a system on only 1 TF. Doesn't matter wich one. But by putting everything is such a way that you find a balance on that TF between not to late in the market and filtering out some of the false trades and noise and beeing quick enough in the market so one still can take nice profits without feeling that other ran away with the biggest chunck of the cake.
Of course losses will still be there because I make it sound easy but it will lead to less frustration. One can find less reason or elements to blame it one (this TF was not in place or I needed to wait on that TF and when it was in place then it was already to late....etc..).
When one looks continiously to severall TF's one will have continiously the feeling that today it was better to trade this TF and the day after one has the feeling to trade an other TF...etc...
Concentrating on only one TF takes away those frustrations.
I find it better not only to find a profitable system but a system that gives as least frustrations possible. Certainly when one descided to trade a system over a long period of time. And addapt the system or values or parameters to that single TF if the avg. daily ranges would start to change dramaticly.
Bottom line is that
personally I learned that the advantages of trading on multiple TF's don't weight up to the disadvantages.
As said Simba only my opinion.
Regards...iGoR
PS. Did you know that this year again a belgium beer is called out as best beer in the world... "Karmeliet"
. So I have a couple of them waiting for you in the frig.
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