TFs,Candles,Charts,Averages,...etc

Useless stuff....?

  • Yes

    Votes: 1 25.0%

  • No

    Votes: 3 75.0%
  • Total voters
    4
columbus

columbus

Well-Known Member
#1
#1
A small exercise ,which is better Time Frames is carried out,taking into
account from 1min to 10min.




Clearly 8min,9min & 10min are clearly ruled out since they give less number
of candles.On the other hand 1min & 2min will give too many candles.That
leaves 3min~7min in fray.

Sometimes it is felt that even 5 min time interval is not sufficient ,especially
in the midway.That means 6min & 7min is out of the fray, leaving 3min to
5min.
 
columbus

columbus

Well-Known Member
#2
#2
We have TWO types of charts.
1.Fixed type
2.Variable type

1.In FIXED type ,the Left side and the Right side timings are fixed.
As of now ,the LEFT is fixed at 9.15AM and RIGHT at 3.30PM.
The advantage is GRAPH VARIATIONS are fixed.In other words Graph will
retain its shape throughout time.I remember CNBC used to give charts in
this way few months ago but discontinued it later on.

2.In VARIABLE type ,tha left is fixed at 9.15 AM but right is kept at
CURRENT time.(It keeps on changing).So the graphs will change the shape.
So WIDER mountains in midway looks narrow once market ends and narrow
montains midway becomes spikes once the market is over.Most of the
channels and brokers give charts in this way.
 
R

Reggie

Well-Known Member
#3
#3
Columbus,

You are right in that higher timeframe gives fewer candles. To overcome this, one can use a 3 or 5 day chart. I also use 15 day 15 minute chart. The higher timeframe (also 30 & 60 minute) are used for confirmation of entry. These timeframes are commonly used by many traders.

columbus said:
A small exercise ,which is better Time Frames is carried out,taking into
account from 1min to 10min.




Clearly 8min,9min & 10min are clearly ruled out since they give less number
of candles.On the other hand 1min & 2min will give too many candles.That
leaves 3min~7min in fray.

Sometimes it is felt that even 5 min time interval is not sufficient ,especially
in the midway.That means 6min & 7min is out of the fray, leaving 3min to
5min.
Click to expand...
 
columbus

columbus

Well-Known Member
#4
#4
Reggie said:
Columbus,

You are right in that higher timeframe gives fewer candles. To overcome this, one can use a 3 or 5 day chart. I also use 15 day 15 minute chart. The higher timeframe (also 30 & 60 minute) are used for confirmation of entry. These timeframes are commonly used by many traders.
Click to expand...

Reggie,

you are correct.One can use high time frames with last few days samples.
If you see the current day graph with low time frames then you will see
a lot many CHANCES are missed.If one utilizes the all chances or not ,is
entirely a different issue. For example,if one uses a chart of 5min duration
and changes to 3 min ,then it give a better picture of entry/exit.That why
I advocate between shifting to low frames to high frames occasionally.
 
columbus

columbus

Well-Known Member
#5
#5
REPEAT

Though AVERAGING is not GOOD always,sometimes it helps.Never average
ONCE or TWICE and with a view to square off in the day itself.If you do
AVERAGING comfortably itself indicates you are going against the TREND.

A small exercise is undertaken of different Averages and associated RISKs
is illustrated below.

NORMAL: At each fall one lot is added.
ex: 1+1+1+1+1.....

FABONACCI: At each fall is summation previous last 2.
ex: 1+1+2+3+5.....

12345Fashion:At each fall lots are added in the fashion of 1,2,3,4,5,.....
ex: 1+2+3+4+5.....

CUMMULATIVE :At each fall lots are added of previous ALL.
ex: 1+1+2+4+8.....

DOUBLING :At each fall lots are added double the previous value.
ex: 1+2+4+8+16.....



A hypothetical example is taken to explain in a better way.

Normal:
HTML: 
  1              1            1             1          1
5040           5020         5000         4980        4960
Average        5030         5020         5010        5000
Lots:5

Fabonacci:
HTML: 
    1            1           2             3           5
5040           5020         5000         4980        4960
Average        5030         5015         5000        4983
Lots:12

12345:
HTML: 
   1            2            3             4           5
5040           5020         5000         4980        4960
Average        5026         5013         5000        4987
Lots:15

Cummulative:
HTML: 
 1              1           2            4            8
5040           5020         5000         4980        4960
Average        5030        5015          4998        4979
Lots:16

Doubling:
HTML: 
  1             2             4           8           16
5040           5020         5000         4980        4960
Average        5026         5011         4994        4976
Lots:31

Risk Analysis:

The results from above individual table are presented
in this below table.

The best Average Method is one which gives Good
Average Effect.(Closet to last value) Going by this
DOUBLING gives best results,but unfortunately one tends
to hold many lots. Therefore we have to consider this
along with Risk. An attempt has been made to put
into tabular form Effect(difference between last 2
values) & Risk (Lots*Effect)
HTML: 
                   Average.4         Average.3        Average.2
                 Eff....Risk       Eff....Risk       Eff....Risk
Normal           40....200         30....120         20....60
Fibo             23.... 276        20....140         15....60
12345            27....405         20....200         13....78 
Cumm             19....304         18....144         15....60
Doub             16....496         14....210         11....77
Averaging is quite normal in Option Trading since less capital
involved per lot in case them.Whereas other instruments take
good amount of capital.
 
columbus

columbus

Well-Known Member
#6
#6
HEIKIN-ASHI candles:

Heikin-Ashi Candlesticks are an offshoot from Japanese candlesticks. Heikin-Ashi
Candlesticks use the open-close data from the prior period and the open-high-low-close
data from the current period to create a combo candlestick. The resulting candlestick
filters out some noise in an effort to better capture the trend. In Japanese, Heikin means
"average" and "ashi" means "pace" . Taken together, Heikin-Ashi represents the average-pace
of prices. Heikin-Ashi Candlesticks are not used like normal candlesticks. Dozens of bullish
or bearish reversal patterns consisting of 1-3 candlesticks are not to be found. Instead,
these candlesticks can be used to identify trending periods, potential reversal points and
classic technical analysis patterns.
(courtesy:Chartschool)


A notable feature of ASHI candles is most of the candles have ONE wick.
In case of strong UP trending market ,we will find the WICK pointing to
UPWARDS, in case of strong DOWN trending market ,they point towards
DOWNSIDE and small candles with 2 wicks either indicate a indecisive
period or REVERSAL.

Normal Candles:




Ishi Candles:


Courtesy:ZERODHA
 
internet_fanbboy

internet_fanbboy

Active Member
#7
#7
columbus said:
REPEAT

Though AVERAGING is not GOOD always,sometimes it helps.Never average
ONCE or TWICE and with a view to square off in the day itself.If you do
AVERAGING comfortably itself indicates you are going against the TREND.

A small exercise is undertaken of different Averages and associated RISKs
is illustrated below.

NORMAL: At each fall one lot is added.
ex: 1+1+1+1+1.....

FABONACCI: At each fall is summation previous last 2.
ex: 1+1+2+3+5.....

12345Fashion:At each fall lots are added in the fashion of 1,2,3,4,5,.....
ex: 1+2+3+4+5.....

CUMMULATIVE :At each fall lots are added of previous ALL.
ex: 1+1+2+4+8.....

DOUBLING :At each fall lots are added double the previous value.
ex: 1+2+4+8+16.....



A hypothetical example is taken to explain in a better way.

Normal:
HTML: 
  1              1            1             1          1
5040           5020         5000         4980        4960
Average        5030         5020         5010        5000
Lots:5

Fabonacci:
HTML: 
    1            1           2             3           5
5040           5020         5000         4980        4960
Average        5030         5015         5000        4983
Lots:12

12345:
HTML: 
   1            2            3             4           5
5040           5020         5000         4980        4960
Average        5026         5013         5000        4987
Lots:15

Cummulative:
HTML: 
 1              1           2            4            8
5040           5020         5000         4980        4960
Average        5030        5015          4998        4979
Lots:16

Doubling:
HTML: 
  1             2             4           8           16
5040           5020         5000         4980        4960
Average        5026         5011         4994        4976
Lots:31

Risk Analysis:

The results from above individual table are presented
in this below table.

The best Average Method is one which gives Good
Average Effect.(Closet to last value) Going by this
DOUBLING gives best results,but unfortunately one tends
to hold many lots. Therefore we have to consider this
along with Risk. An attempt has been made to put
into tabular form Effect(difference between last 2
values) & Risk (Lots*Effect)
HTML: 
                   Average.4         Average.3        Average.2
                 Eff....Risk       Eff....Risk       Eff....Risk
Normal           40....200         30....120         20....60
Fibo             23.... 276        20....140         15....60
12345            27....405         20....200         13....78 
Cumm             19....304         18....144         15....60
Doub             16....496         14....210         11....77
Averaging is quite normal in Option Trading since less capital
involved per lot in case them.Whereas other instruments take
good amount of capital.
Click to expand...
Nice Analysis.

I used to be an advocate of averaging, but not much these days.

Also, allow me to ask your views about a situation -:

The Situation

You have a system in hand which gives 85% successful trades with .5 Reward/Risk which equates to a PPT(Profit per Trade) of 1.4% per trade.

So should one go for Doubling in Averaging in such a system considering high success rate (If doubling works then PPT would rise to 1.75% per trade) ?
 
columbus

columbus

Well-Known Member
#8
#8
internet_fanbboy said:
Nice Analysis.

I used to be an advocate of averaging, but not much these days.

Also, allow me to ask your views about a situation -:

The Situation

You have a system in hand which gives 85% successful trades with .5 Reward/Risk which equates to a PPT(Profit per Trade) of 1.4% per trade.

So should one go for Doubling in Averaging in such a system considering high success rate (If doubling works then PPT would rise to 1.75% per trade) ?
Click to expand...
Hi Inernet-fanbboy,

Though I have not understood your situation fully,I will try to a bit.

Though I used this example taking into consideration FUTURES as
instrument but averaging FUTUREs is capital intensive.Generally It is done
in OPTIONS ,that to OTM options ,since they take little capital per lot.

Normal,Fabo and Cummulative can be kept in Class.1 and other two in
Claas.2.Certainly Doubling is the best average method but it carries a lot
of risk.
 
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