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Lane_S

1 Minute Candlesticks

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I am a couple of weeks into trading in simulator.  I think the toughest thing so far is not getting caught up in the 1-minute candle action.  I get so fixated on watching the price action there, that I fail to keep it in the context of the other time frames.  Patience in the other time frames is not my virtue when candles are flying all over the place on the 1-minute chart.   I guess all of that is part of the learning curve, though.  

I did much better with this yesterday and had two really good trades, catching a dollar move twice.  I also had two trades that were a wash - 10 cents up on a stock then giving 11 cents back, and one that flat went the opposite of the setup I expected and lost 26 cents.  All but the last one, I could have traded better, had I not gotten trigger happy by overly concentrating on the 1-minute chart.  

Does anybody have any pointers on using the different time frames correctly?  It looks like Andrew is trading the 1-minute candles much more now than in his books.  In what time frame is everybody else looking for setups and managing their trades?  I know congruence is also key.

In which time frames are the moving averages more important?  Is VWAP more important on the 5 min vs the 1 min or the 15 min.  Or does each stock tend to trade one time frame 'better' than another?  Do you just have to watch real-time price action to see in which time frame a stock will respect moving averages and VWAP, or are there some general rules that apply broadly?

Sorry for the barrage of questions.  I am really enjoying learning this!

This community is great.  Thanks @Andrew Aziz for your awesome books and the rest of the community for the wealth of information!

-Lane-

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I am only in this a month so I wont try to give you exact answers as to mess you up.

One of the things that I have learned is to use multiple time frames for confirmation of a setup and price action. I am trying to get away from trading the 1min and mostly use it for my stop and targets.

Make sure you post your charts for the moderators to go over with you when you can. They usually due trade reviews at 3pm est.

Good Luck and have fun....

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Posted (edited)

If you're going to trade off of the 1 minute chart, you really do need to be in and out very quickly.  As soon as the price starts to roll over OR if the price isn't moving how you anticipated, you need to be very quick in your decision to stay in or get out.  That's why I personally prefer using the 5/15 minute charts for trades, because I'm just not very good at the whole "scalping" trading style.  

I personally feel that for momentum stocks that are moving quickly, you can use the 9/20 ema for pullbacks.  However, if it has lower volume/slower price action, I prefer to focus on the 5 minute and 15 minute chart emas.  The 20 moving average slope is what I find to be the most significant of all.  I try to take all trades (excluding reversals) in the direction of the 20ema.  Ultimately, I try to use the moving averages that the chart has shown are the important ones.  If a stock is bouncing off of the 9ema, then that's the EMA I'm going to use for entries.

Edited by KurtLoeblich

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Glenn,  

Yes, I am trying to get the hang of incorporating multiple time frames and finding setups where the charts harmonize somewhat.  I don't want to focus so much on the 1-min, but it just draws my attention to it. 

I plan on journaling and posting trades once I get a little further along.  Right now I am just focusing on finding setups in the price action and figuring out which ones I am better at trading. 
 

Good luck to you as well!

 

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Kurt,

Thanks for the input.  I don't really want to try to scalp and trade the 1-min chart starting out.  However, I do understand how important it is to watch it  to get better entries and stops.  It seems to just be a psychology issue right now.  I have to get used to seeing price action happen in real time and not let the lower charts affect the patience I need on the higher charts.  I just wondered if anybody else suffers from the same problem

Does a stock tend to respect the same MA in certain time frames over multiple days or weeks, or is each day a new ballgame?  I'll notice on the pre-market that it is said of some stocks that they "don't trade very well".  Is that in part because they do not seem to respect any levels or averages?

 

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5 hours ago, Lane_S said:

Kurt,

Thanks for the input.  I don't really want to try to scalp and trade the 1-min chart starting out.  However, I do understand how important it is to watch it  to get better entries and stops.  It seems to just be a psychology issue right now.  I have to get used to seeing price action happen in real time and not let the lower charts affect the patience I need on the higher charts.  I just wondered if anybody else suffers from the same problem

Does a stock tend to respect the same MA in certain time frames over multiple days or weeks, or is each day a new ballgame?  I'll notice on the pre-market that it is said of some stocks that they "don't trade very well".  Is that in part because they do not seem to respect any levels or averages?

 

Its very much day by day.  When we say trade very well, its typically from past experience. Some stocks just have a tendency to not make large or predictable moves so we tend to "blacklist" them unless they've shown that they are going to trade nicely. It just comes from personal past experience and it is impossible to know how a stock will trade before you get into it. 

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My favorite strategy on the 1 min chart is waiting for the price to go back to the EMA-20. Most of the time it is possible to get in for a quick scalp and lock in some good gains. However, I also use a 1-2 min rule just in case the price decides to move further up or down depending on your position.

If you choose to only use the 1 min chart, expect to get out of the trade relatively fast. you can always keep a few shares for a bigger move if the price moves higher or lower.

 

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3 hours ago, KurtLoeblich said:

Its very much day by day.  When we say trade very well, its typically from past experience. Some stocks just have a tendency to not make large or predictable moves so we tend to "blacklist" them unless they've shown that they are going to trade nicely. It just comes from personal past experience and it is impossible to know how a stock will trade before you get into it. 

Great, thanks.  I'll keep putting in time in simulator and keep studying...

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3 hours ago, Kasper said:

My favorite strategy on the 1 min chart is waiting for the price to go back to the EMA-20. Most of the time it is possible to get in for a quick scalp and lock in some good gains. However, I also use a 1-2 min rule just in case the price decides to move further up or down depending on your position.

If you choose to only use the 1 min chart, expect to get out of the trade relatively fast. you can always keep a few shares for a bigger move if the price moves higher or lower.

Yes, I have really noticed on a couple of trades how powerful the 20ma  is in the 1-min chart - especially those quick hits that jump there and right back.  

I don't have the skill and speed to scalp the 1-min yet.  I'll try your strategy in sim once I get farther along.  What do you mean by a 1-2 minute rule? 

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1-2 min rule is just selling/covering if the price doesn't move in your favor in the first 1-2 mins.

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2 hours ago, Kasper said:

1-2 min rule is just selling/covering if the price doesn't move in your favor in the first 1-2 mins.

I figured that was the case, but I wanted to be sure...thanks!

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Posted (edited)

Hi! 

Trading the 1 min chart can get us in a mess, I honestly have been trading the 1 min chart for like 5 months. Imagine it, 5 months of only 1 min chart and I was convinced I was doing great until I decided to trade other timeframes.

I use the 1/2/5/15/30/daily, but the main ones for me are 1/5/15. I use the one min chart mainly the first 15 mins, but I also pay attention to the 5 min chart, maybe the 1 min chart is giving us an abcd around the 20 on the 1 but on the 5 it's the third huge white candle in a row. Doesn't that indicate that the stock is extended and better waiting for a pullback? Yes I see an abcd on the 1, but it's so extended on the 5. After 9:45-10:00 I switch to 5 min chart. I want to see a setup on the 5, but my entries are on pullbacks on the 1. My stoplosses based on the 5 min chart, my targets are based on the 5 min chart. Later on the day I use 5/15(in the afternoon) I think it's even better if I just eliminate the 1 and watch the 5/15 in the afternoon which is something I'm working on right now!

Regarding Andrew, don't forget he's trading the open and most of the times he's done the first 15 mins which is why he uses the 1 min chart a lot. Basically at the open the 1 min chart is everything you can base your desicions off. The 5 is important but you can barely find a setup on the 5 min chart the first 15-30 mins

Edited by Aiman Almansoori
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3 hours ago, Aiman Almansoori said:

Trading the 1 min chart can get us in a mess, I honestly have been trading the 1 min chart for like 5 months. Imagine it, 5 months of only 1 min chart and I was convinced I was doing great until I decided to trade other timeframes.

I use the 1/2/5/15/30/daily, but the main ones for me are 1/5/15. 

Thanks Aiman for the insight.  I have been focusing on trading the open up until about 11am, so I have been using the 1/2/5/15 and the daily for support and resistance lines.  I use the 1 min and 5 min for setups, and look to the 2 and 15 for confirmation of a setup still moving in my favor or falling apart.  I just need to develop the patience to wait for setups to develop in the 5-min time frame.  It's hard to wait for 5-minute candles to form!  I'm not sure I could ever trade the 15 or later!

I am also still trying to figure out how the moving averages and VWAP relate between the different time frames, which ones to trust when, and also seeing congruence between the charts.  I have seen that a setup can look great in one time frame, but can be a trap if it is not reflected in the other time frames.  You seem to be right about moving to the larger time frames as the day moves along and the volatility decreases.  

Great stuff - much yet to learn...

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I think the crux of the problem is you can have one or several down trends on the 1-minute candles and still be in an uptrend in the longer time frames.  It conflicts the mind...

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