only be active for 50% or less of their respective trading days. You want to pare every market down to size. You should never have to trade the entire session. Ever.
Im not day trading.
If that is the case, then time frames intra day mean little to you. Your trades will be influenced by this but if you are swing trading - you are going to buy trades and hold for multiple days or even weeks - then your best movement is probably happening in the time frame mentioned above. But ultimately you are watching the only things that matter - the high, the low and the close each bar whether that is daily, or four hours, or 377 ticks.
Minute Charts, Tick Charts, Daily Charts, Weekly Charts
So many choices. Heres what we like to do. When we personally lean towards the tick charts. If we are the index futures, one of the best for us is the 233 tick or, pulling out a little bit, the 377 tick. Youll notice these are odd numbers. We like to use Fibonacci numbers. Could we have made it 230 and 375 instead? Sure, it probably wouldnt make a huge difference in the charts themselves. However, much of trading is crowd psychology and we know that for the simple fact that thousands of traders trade using Fibonacci numbers, including for time frames where wed rather see what they are seeing. Therefore it makes sense to do this rather than use a similar but random number.
You can read all about Fibonacci there if you like.
If we are trading Forex on a basis? 55 ticks, 89 ticks and 144 ticks are the most common.
If we are swing trading Forex? 233 ticks can be a real nice one to swing trade off of, or 377.
The same works for stocks we can trade with tick charts, or intraday with time charts such as 3 minute, 5 minutes, 10 minutes, etc. You just experiment with your chart settings until you find a range that seems to work best. If you go too small, youll have way too much activity and the trading strategy you use will probably become unreliable since you are now reacting off of any type of market noise. If you go too large, youll end up with trades that will require large stops to hang on with the swings to match the time frames. You may even get in too late many times since the charts are slower to form but youll avoid virtually all the noise. So, as you can see it is a balance, but it is not difficult to pull up a chart and just look at it and conclude in seconds that it will work, especially if you have a top notch strategy
Thats why it is crucial to have a strategy that works across all these time frames and markets. Youll visually be able to decide in seconds what tends to paralyze many other traders and youll be settling on exactly what to trade in no time at all always knowing youll have way more opportunities than you could ever pursue on your own.