D1 and M5, which is noiser?
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Thread: D1 and M5, which is noiser?

  1. #1
    There's a general belief that price in reduced timeframe is noisier than price in higher timeframe. While noise exists in different timeframes, I argue that the degree of noise is in proportion to the timeframes. I.e. the higher is that the timeframe, the bigger is the noise.

    Different time periods per day do have distinct characteristics, for instance, the volatility of London available is higher, as well as, rollover time. News are more likely to be published at some time periods, etc.. An intraday trader has to take notice of all of these, and should not be treated them as noise, although these may produce the intraday chart looks somewhat noisier.

    Intraday traders trading with lesser timeframe can be flexible in preventing scheduled news. When news is, they can keep their position clear. For D1 or above traders, they are more probably have to accept these noise like economic date release in their trading. In that perspective, D1 traders can suffer more noise than the usual intraday trader. Right?

    Comments are welcome!

  2. #2
    One day I read this: It is not about the time, it's all about the trader. Quite important imo.
    Then attempt to specify what sound is for you, because some kind of traders may love it (aka: volatility).
    If you're speaking about trend sound, than I should say that each time has its own tendency, so stick to it (aka: don't see 4 timeframes contemporary) and employ your trading method. period.
    You stated that daytraders can prevent news interval, that's correct I agree with this, but not everybody is able to trade lower timeframes, it's all about the psycology (aka: stress threshold).
    Daytrading can clearly be profitable, but you have to achieve it with patience, working mostly on you than on the trading technique.
    That's why it is advised to begin with greater tf first. Only after proving yourself you may attempt to make things happen faster, by lowering tf.

    That's my view. Sorry for the lenght. Have a pleasant. . .day.

  3. #3
    Of course noise is present in all time frames. A chart is a chart. Dr Elder mentioned in his book that many individuals cannot tell one time period from another just by taking a look at the chart.

    The distinction is that noise on a 5 minute chart means that trades taken will largely drop as the price has not moved significantly in either direction. In addition to how the timeframe cycles quickly hence producing more false signs during the exact same 24 hrs as the day chart. Thus a noisy 5 minute chart can create 5 little losers. On the flip side, noise on a daily chart supplies at least some opportunity to take profit prior to the price reverses. Even if the profit is small. . .one little 20-30 pip winner once a day is far better than just five 15 pip losers...

  4. #4
    I can see calling an excessive amount of info noise is when your goal is to
    obtain a specific percent of a higher-TF play, so that just
    particular larger news items or moves would apply to this particular trade.

    I tend to take the opposite perspective. It's easier for me to think
    each piece of the chart is explainable concerning the rest of
    it. Removing information from the chart in greater TF's leaves
    some moves separated in the lower ones unexplainable,
    thus'noisy'. That anybody would call news, that's the prime
    Agency of the chart, noise befuddles me.

    So, the 1D has my vote as being noisier. The 5'I just use
    to find an overview speedily.

  5. #5
    Quote Originally Posted by ;
    There is a general belief that price in reduced timeframe is noisier than price in greater timeframe. While sound exists in different timeframes, I assert that the degree of sound is in ratio to the timeframes. I.e. the greater is that the timeframe, the larger is the noise.

    Different time periods in a day do have different characteristics, for instance, the volatility of London available is greater, as well as, rollover time. News are more likely to be released at some time periods, etc.. An intraday trader has to take notice of all of these, and shouldn't...
    As you state there is sound on all levels, large moves happen more frequently on smaller time-frames for obvious reasons, but the actual difference is that the size of the spread when compared with the move. The lower you go regarding time-frames the bigger your trade costs are in proportion to the actions you're attempting to trade.

  6. #6
    You are what you love, not what loves you.

    Bit metaphorical, I admit. Noise isn't there. A short-term trader on M5 charts will merely examine the D1 for the day's management and not worry whether or not it's flopping about for this week. A long-term trader utilizing D1 isn't going to appear at M5. Anybody who has a transaction move against them will blame it upon sound on the Specific timeframe they had been utilizing

  7. #7
    Quote Originally Posted by ;
    There is a general belief that price in reduced timeframe is more expensive than price in higher timeframe. While noise exists in different timeframes, I argue that the amount of noise is to the timeframes in proportion. I.e. the higher is that the timeframe, the bigger is the noise.

    Different time intervals in a day do have distinct characteristics, for instance, the volatility of London available is higher, in addition to, rollover time. News are more likely to be published at some time intervals, etc.. An intraday trader has to take note of all these, and should not...
    I don't quite understand what you're attempting to explain with this. Fundamental analysis is played out on bigger timeframe technical analysis. That's only a very simple fact that I've known.

  8. #8
    Quote Originally Posted by ;
    I do not quite understand what you're trying to explain with this. Fundamental analysis is performed on bigger timeframe technical analysis. That is only a simple fact I've known.
    Mike aren't you missing something in your above statement? If not, count me off cuz' I do not get it. Care to explain a little more?

    Quote Originally Posted by ;
    As you state there's sound on all degrees, big moves occur more often on smaller time-frames for obvious reasons, but the real distinction is the size of this spread compared to the move. The lower you go in terms of time-frames the bigger your transaction costs are in proportion to the action you're attempting to trade.
    Craig, although I must agree with you, concerning the transaction price, it surely may be perceived as greater value as a result of smaller profit potential ratio in shorter time frames, aren't the required stop also bigger in a higher time frame, hence your risk increases to some point your transaction cost become neglectable? Just a thought.

  9. #9
    I didn't know really what is usually meant by noise a couple of minutes ago, and, after reading this thread up to now, I still do not.


    What's noise?


    (This should be fun...)

  10. #10
    Its only noise if those analyzing the reduce time frames do not understand how to read Price Action...

    Truth is, price action is different the same identical way whether on a 1 Minute chart or a Daily chart. . .one happens faster than the other with more chances...

    When you think about Time Frames, think Fractals. . .that's basically what you are seeing.


    Quote Originally Posted by ;
    There is a general belief that price in lower timeframe is noisier than price in higher timeframe. While noise exists in various timeframes, I argue that the degree of noise is in ratio to the timeframes. I.e. the higher is that the timeframe, the bigger is the noise.

    Different time intervals per day do have different characteristics, by way of example, the volatility of London open is higher, as well as, rollover time. News are more likely to be released at some time intervals, etc.. An intraday trader has to take notice of all these, and if not...

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