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02/23/2007 Archived Entry: "Trading Time Frames"

> Harry wrote:
> Hello Neal
>
> My question today is regarding time frames. My understanding so far with regards to time frames is that we should attempt to use 3 time frames for high probability trades and that each time frame should be about 4-6 times greater than each other. So for example 60min, 4hr, daily would be an okay combination or perhaps daily,weekly,monthly.
>
> 1) Would you say that using only 2 time frames is a feasible approach? (I have had some good results just using only 2)
>
> 2) Is the '4-6' times bigger approach good enough to decide on time frames?
> 3) Trading a 5 minute chart, I currently use a 30 minute to determine trend. What higher time frame would you suggest for a third time frame?
>
>
> Thanks Neal
>
> Harry

Hello Harry,

1) Yes it would be fine.

2) I'm not a stickler for the 4-6 range. Whatever works for you is best. However, I do suggest that you stick to the time-frames that are most used by other traders. There is a lot of value in knowing what the other traders are seeing on their screen. Peek over their shoulders..

3) Five and 30 are good, you could either add the 15 or the 60 to those two. You don't have to add a thirds. As with many aspects of trading, it depends more on what you are accustomed to, what you have become good at using..

-Neal.