Scalping vs higher Timeframes


nice -----nvp --------- very simple if you know what to look for--------- hope you agree

Hey BP

yes - i do agree.....

in any timeframe all i do is look for the most volatile tradable currency pairs and patterns .........my background is in the higher TFs .......ideally Daily TF.....thats where everything i have ever shared here in this Blog and my other forums re Strengthmeters is most effective ........however a few years back I was working with some very good scalpers and was persuaded to focus more on scalping again .....as I enjoy active live trading ...and daily TF trading is like watching paint dry .....

every day i now happily sacrifice a few percentage points on spreads and win rates etc to Trade live lower TFs ........

if i am on say the 1 mins ...........remember thats 1,440 times faster than the daily TF ...........thats a whole lot more trades in a year !!!

I now have more time to trade and the volume of trades over time more than covers things .........easily

N

Look guys .....

if you are becoming more experienced in trading you will have read that higher Timeframes generally are more reliable than Trading lower timeframes .........

I am not going to go into the detail here why that happens.....but generally .......I agree .....

However if you have good solid systems and strategies you can make lower Timeframes still pay......

lets look at the hypothetical math below

2 systems :-

System A pays out on average say a net 5% Return every 10 trades

System B pays out on average a net 2% every 10 trades

which is better in real terms if you have the time to trade system B ??

Answer

lets do the math - lets assume that both systems enjoy similar number of trade signals (per 1,000 bars)

in fact we dont even have to do that ...........all we do is devide one timeframe into the other and see where the returns are now

Assume System A is on the Daily TF

System A return = 5% on daily

system B - adjusted return to Daily returns

Baseline = 2%

4 hour (x6) = 12%

1hour (X24) = 48%

15min (X96) = 188%

5min (X288) = 576%

yes but thats assuming we are robots trading 24 hours a day ..........!!!

Can you see the theoretical returns here if you put the time in .........??

I will trade 96 times more often than the daily TF on the 15m timeframe ....as a 24/7 robot

even if you said above that you now only trade 8 hours a day live ......so take results all down by 2 / 3rds ??

but it still proves my point i hope ....

I take a decent 5% system on the Daily .....

I dilute it to just 2% for the lower TF action and slippage etc ......

I trade the 5 min TF for just 8 hours a day live

and i would still return 576% / 3 = 192% vs the same 5% on the daily for the same period .....

convinced ? .......

I have been for years .......and yes - of course I can do both at the same time !!!

have a good day

N


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