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The Importance of Time

Discussion in 'Trading Strategies/Systems' started by brty, Dec 23, 2009.

  1. brty

    brty

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    My trading tends to indicate that movements in price through time are important in trading. Do you agree or disagree. How??

    brty
     
  2. motorway

    motorway

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    AGREE



    Motorway
     
  3. brty

    brty

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    Thanks motorway,

    Now I know you have a different meaning of time to me, could you please explain.

    My interpretation of time is linear, according to hours/days the market is active. It works for me and I have my understanding of it. A meandering of price over time has different meaning to a rush of price over time.

    Why do you think this is not important??

    brty
     
  4. motorway

    motorway

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    No it is just time frames on charts I disagree with
    I still measure the moves in terms of TIME

    It is simply how you cut up the data
    what you let draw the bars..

    If the XAO goes up 100 pts
    I measure HOW fast
    By using time
    But I use a chart that just moves as the action does

    Have a look at SAMS charts in the P&F thread
    The TIME ELEMENT is very important

    See where we measure the movements in two hour TIME INTERVALS

    TIME is the essence of those charts

    is the action fast slow dull speeding up down
    THIS IS ALL TIME

    So I agree
    But if you want to use time frames
    That is not about the importance of time
    But what you want to use on one axis of a chart

    I use price on Both so the charts are two dimensional PRICE CHARTS
    with the TIME ELEMENT the FLOW itself


    But there already is a P&F thread..
    and it is there for who ever is INTERESTED in P&F

    Motorway
     
  5. brty

    brty

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    motorway,

    I am easily bored, I could not find it, could you please provide a link.

    It occurs to me that P&F charts rely on box size to determine time. The box size is a function of the drawer of the graph, not of real time (as in hours/days/weeks). How is the box size a real indication of time if it is just selected by the individual, or for that matter better than a "per day" approach???

    To me, (and my trading shows it), it is clear the distinction between meandering prices and accelerating prices, on a linear chart, ie hours/days. If it is meandering prepare to go the other way. If it is accelerating, go with the flow. Simple.

    brty
     
  6. ThingyMajiggy

    ThingyMajiggy

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  7. sinner

    sinner

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    Agree with motorway, it is all just about how YOU choose to represent the data on the graph.

    89 tick and 144 tick charts are common in the trading world. These charts are completely independent of time (candles are only formed once N number of ticks is complete) but they still show data in a very useful and tradeable manner.

    I still prefer bars/candlesticks, because data points like the "hourly close", "daily high" or "monthly open" are important to me, and the quickest way to visually see the relation of those data points against subsequent data is with the appropriate time framed candlestick chart.
     
  8. nomore4s

    nomore4s Commonsense isn't that common

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    I'm pretty sure FrankD uses range bars for his trading
     
  9. ThingyMajiggy

    ThingyMajiggy

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    range bars are different from tick charts though aren't they?
     
  10. brty

    brty

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    Interesting how this thread has few replies in regard to time, rather than how time is represented on a chart.

    In my trading, time is important. A trade has to go my way relatively quickly or I will close it, rather than wait for a stoploss to go off. I use a time stop.

    It will also vary according to what the price action of a particular stock is doing.

    I have stated in other threads that I consider my trades incorrect, and wait for the market to prove me correct. Should that proof not come quick enough then the time stop goes off.

    I think it is a different approach to most traders that have a stop loss set, and wait for the market to prove them incorrect. By using time to prove something incorrect, i have found that losses are minimised as the usual action of my trades seems to be sideways movement before going down (for long trades). Using time gets me out with slight profits sometimes (OK change) instead of accumulating drawdowns.

    How do others use time??

    brty
     
  11. skyQuake

    skyQuake

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    For something interesting to work on, have a look at silence in markets as opposed to activity. (Silence as in lack of trades, or big volumes for the more active shares). These gaps in trading activity can reveal a lot about the 'weaker' side of the order flow.

    Happy new year!
     
  12. Timmy

    Timmy white swans need love too

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    Same here
     
  13. Timmy

    Timmy white swans need love too

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    Nice thanks sQ
     
  14. Synergy

    Synergy

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    It is interesting that there is so little talk of time in general on forums.

    Time is Money.

    Halving your time in trades while maintaining the same profit is the same as doubling your profitibility in trades, so long as you still have the ability to take twice as many trades.

    The added advantage is the more trades you take, the smoother your equity curve is likely to be and the more compounding takes effect on your account. The downside is more trades, more brokerage.

    The main performance indicator i look at is Average % gained per day held. It puts equal importance on profit and time and can be used to compare any 2 systems providing there are no major drawdown issues.

    So yes, I also use a time based stop, with an initial stop loss in place before it kicks in.

    Something i'm looking at currently is shortening the trade length right down and using a time based stop with a % gain target to cut roughly 90% of trades very early - only letting the quick flyers run longer.
     
  15. lukeaye

    lukeaye

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    Good post skyquake. very true. I agree that alot can be revealed from differences in time to move from support to reistance in a range trading stock, to find weakness.

    ie it takes 3 days at support for supply to dry up, but one day at reistance for demand to dry up. Clearly supply is where the strength lies.
     
  16. tech/a

    tech/a No Ordinary Duck

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    A Steidlmayer fan.

    How does your statement fit with M/P

    As volume is an important aspect of M/P.
     
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