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Transition from M5/M1 to higher timeframe

 
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eduardoandrade.ec

Transition from M5/M1 to higher timeframe

Hey guys!

I have been dealing with a bit of a struggle trading on M5 because it recquires a certain amount of attention that sometimes I cannot afford to give. I have a newborn and the routine have been a bit crazy, and will be crazier when her mother resumes working.

I thought about migrating to M30 or H1, or at least M15, then be more active around the time the candles close, which would give me a bit more flexibility to do other things in the house. At the same time, though, almost all my trading experience is on the M5 timeframe.

I get a bit worried about missing important information if I trade on a higher timeframe and I am definetely not used to set stop losses bigger than 15/20 pips. Also, I don't really know how to deal with the economic announcements, because on M5 everything is clear when and how much it has happened, but maybe on H1 things can get confusing. Of course I could use more than one timeframe if that concerns me that much, but I like to backtest whatever I do before, and I find it easier to do so on a single timeframe.

On M5 I could have a stretch of 3 or 4 hours trading (more than that I lose efficiency), but that would not make sense on H1 for example. Also I am used to see support and resistance levels from early london session and asian session, because I trade mainly during the first 4 hours of NY.

I understand the fractal nature of the markets, but still looks like it can be a different beast, not only in terms of the understanding of what is going on, but also on the mindset, with bigger stop losses, maybe not watching a trade develop all the time, using more a take profit, things like that.

I would like to see some thoughts about that, and also in terms of profitability, if you have gained more or less, became more efficient or not, using higher timeframes.

Cheers!

Fri, 02/22/2019 - 3:40pm
 
bryangriffin

I went from scalping on the M1 chart to using the Forex Fanatics strategy on the D1 chart. So far I love it and the technical analysis appears to work much better without all the noise on the smaller time frame. I only have to look at the charts once a day right around the time the daily candle closes to manage my trades. It's very convenient for someone like me with a day job.

Don't worry about large stop losses. Just stick to your strategy and scale your TP and SL to the appropriate size for the time frame you're using. Use only .01 lots size and you'll be fine.

 
eduardoandrade.ec

But how about your return in a monthly basis? I imagine that with so much fewer trades, and considering the ones that don't go on your direction, things get very different. I don't have yet such a long term patience for that. Can easily stay a week or two without placing a trade, is that correct?

 
bryangriffin

That's correct if you stick with a single pair. However, we have about 27 pairs available and I trade every single one. I have at LEAST 2-3 positions on at any given time, and very frequently much more than that. I've been in Gold 2 for right at 3 weeks and my realized return is currently 14.3%

 
Rookie

bryan that's cool.

 
bryangriffin

Well, I took a 5% loss limit Sunday night. I had about 9 positions on and all but 1 went against me so the risk management kicked me out. Oh well, I didn't break any of my rules so I'm not too upset. I'm still up about 8% realized for the month and I'm back into about 10 positions that are up 1.4% as I type this. I know I'm over trading but for now I'm staying the course. I'm purposefully trying to push the application of the strategy until I find the breaking point. From there I will dial back and work on refining it for a smoother equity curve.

 
Rookie

Bryan, 5% risk limit reached, while that ensure you get a break and your here to trade another day it is also indicative that your rules need to be tightened up someplace along the trail... just saying as you stated "I will dial back and work on refining it for a smoother equity curve." good call.

 
stuart23

Bryan, you say that when you hit the 5% stop limit you had not broken any of your rules. Perhaps when you took the 5% loss you actually found a breaking point of your strategy and one of your rules should be to not over trade.

 
coolpips1r

it's not "overtrading" if you are just going along with your rules, the problems lies in too large of a lot size and taking more than 5% risk for the total account. If you size your trades based on max account risk and max number of positions you could possibly have open at one time then you wouldn't run into that problem. but it's not "over trading" in my opinion.

 
bryangriffin

Rookie, stuart, coolpips... you all make good points. Thanks for your input. So yes, I found the breaking point because I hit the 5% limit again last night. LOL :-O I read the stochastic wrong on a couple trades so I did break a rule unintentionally and those two positions brought my risk up too high when they went south.

I guess I should clarify when I say my "rules" I'm referring to the strategy because I have not yet begun to add rules into the whole "system" to avoid losses and manage risk. So far my "system" has just been to take all trades dictated by the HMA strategy and see what happens. Now I know that the diversification in trading all available pairs is not enough to overcome the risk in such a small account.

So... the first "system" rule will obviously be to limit total risk to less than 5% at any given time. :-)

 
Rookie

ugh, might I suggest starting with a less aggressive total loss risk and useing the one-click box..just saying.

You don't have to have a lot of risks to make a few pips.

Risk Buffer.JPG