Figures of technical analysis
It is believed among traders that it’s more reliable to work on the higher time-frames, there are less false signals and so on. And there is even steeper opinion that the bigger the frame is – the more reliable it is. What are these statements based on? Can Forex strategy work on any time-frame? What figures of technical analysis work on each frame? Let’s try to understand.
And can this statement be wrong? Whom is such a question profitable for? Of course, such a position can be wrong!!! You don’t have to operate with mathematical formulas to prove it. Everything is much easier. Look at the graph above. What time-frame is it? I made a screen without time scale intentionally, and you can’t see currency quote on the graph, as well as it’s generally impossible to define what kind of currency pair it is.
Parallel to the opinion that it’s much more reliable, more comfortable, more profitable to trade in Forex market on the higher time-frames, than on the smaller ones, it is also believed, that a good working trading system must work on any time graph (on any time-frame) and with any currency pair, on any figure of technical analysis, and in general with any instrument.
But the point is in that any time-frame consists of the smaller ones. The higher time-frame is build from the smaller frames like kit. And everything is exactly the same on all the frames. I dare say, and you can easily see it having looked at the graphs, that the same things happen on each time graph. The same trends, flats, figures of technical analysis and others. Just on the higher frames everything moves much more slowly than on the smaller ones. Sometimes it can take several months to wait for the trading signal on the Day graph. At the same time, there can be for example several trading signals a day on the five-minute graph.
Try to look closely at the graphs again. Check yourself. Can you define what frame is on this or that screen? What is this instrument? It doesn’t work? Who would doubt it. They are like twin brothers. I have marked the trading signals by “Revenge” strategy and “Revenge Modification” strategy on each screen. The trading signals by “Revenge” strategy are marked with letter “R”, the trading signals by “Revenge Modification” strategy are marked with letter “M”. My pattern from “Revenge” is marked with letter “P”. On all the graphs indicator EMA33 is used.
What does it turn? If you mix the graphs with different time-frames, and if you don’t know what currency pair is here, but you will make transactions just following trading signals, so everything will work. And the figures of technical analysis are the same. There are almost no wrong signals, at least shown on the graphs, I have found only one negative transaction. The entrances are not marked in places where the trading conditions of system are not observed.
If someday you will participate in discussion of what time-frame is better, show your opponent this page and ask him to define what time-frame is on the screens, what trading instrument. Well, it’s time to showdown? In the image 1 currency pair AUDUSD M15 8.02.2013 fifteen-minute graph is shown. In the image 2 – GBPUSD H4 3.05.2011 four-hour graph. In the image 3 – SGDJPY Weekly 11.07.1999 weekly graph. In the image 4 – Gold D1 9.11.2005 day graph. In the image 5 – EURJPY M1 27.02.2013 minute graph.
Thus you can see that both systems, “Revenge” and “Revenge Modification”, feel perfect on any time-frame, with any trading instrument, like my pattern based on the exact contact with MA33. I also assure you, these systems will work in any market, whether it is an equity market or stock. The question is: do you want to wait for a signal for 3-4 months or to make 3-4 trading deals a day?