1-5-15-16 min charts

[ewill 10]

Hi Andrew -

 

Could you please make some comments about how you think about these different

chart timeframes. I think I have learned that the 1 min chart is good for watching for when

to exit, but might be too volatile for finding an entry. But really, I am not sure. I have all four

of these timeframes on my screen but don't think I am making the best use of them.

 

Thanks.

[Robert H 455]

Ewill, Andrew explained the 1-min vs. 5-min here:

Andrew, when should I use the 1-minute chart vs. the 5-minute chart?

>>> I try to watch both and make my overall decisions based off the 5-minute chart. The 1-minute chart sometimes can give better resolution, but often price movement is choppier. Engulfing patterns and higher-high/higher-lows hare meaningful on the 5-min chart, but are just noise on the 1-min.

 

It also depends on the speed of the trade. If you expect a big move or big drop that might take 10 mins or so (i.e, a reversal), then 5-min must be only decision making chart. However, if u scalp low-float stocks only for a few seconds, then 1-min must be used in addition to 5-min chart.

 

For example, when I go long low-float stocks I look at 1-min chart, but I never do this when stock is being heavily bearish on 5-min chart, even though it makes a 1-min high with good volume. I don’t do it because 5 min is very bearish. Usually 1-min highs are a good signal, only when they are close and same as a new 5-min high. The 1-min must be in agreement with the larger trend on the 5-min.

 

The daily chart is used for finding support/resistance levels during the pre-market watch list build. I don't think Andrew uses the 15-min and 60-min chart at all. Some people--like Barry from TradeIdeas--trade solely on the 15-min chart.

[Wormser 0]

Very active stocks sometimes are bouncing up and down on each 5 minute candlestick when they are being heavily traded. A 5 minute candlestick might rise up and make a new high and then go back down below that level as it's forming. Since DAS shows you in real-time what the candlestick is doing it can hop up and down erratically. In terms of deciding if a 5 minute candlestick makes new high (or new low if shorting) do you wait till next 5 minute candlestick forms to decide if the previous one made new high or would you accept temporary bounce up on the current 5 minute candle , possibly confirmed with 1 minute chart, as sign stock is going up (along with other indicators)?

[Andrew Aziz 98]

New 5 minute high or low is measured from current candle compared to previous candle. Volume is good confirmation also. If stock is bouncing too much up and down then it is choppy and more difficult to trade. New high or low had less meaning when price action is not clean.

[Wormser 0]

Just so I'm clear, in the case of a bouncing 5 min candlestick do you a) pass on the trade because it's "more choppy and difficult to trade, b) look at supporting factors such as "volume as good confirmation" and perhaps the 1-minute chart, and L2 info or c) wait till the next 5-minute candlestick to see where the previous candle actually ends up.

I have found sometimes patience is a virtue with a bouncing 5-minute candle that reaches my stop while forming and bounces back above it so I don't wind up taking the loss. Several times when I found a good setup and was convinced stock was going higher fighting the urge to sell too soon paid off when it would settle down and go higher when the candle finished forming.