I have noticed that there are several people promoting these charts as a way for traders to make money. With High Frequency Trading firms getting so much press because some are incredibly profitable, there is a tendency among traders to move toward smaller and smaller time frame charts. Too many things on a chart distracts traders from the bars on the chart, and they need to be able to see the patterns that the bars are creating to find trades. A trader can additionally add the 20-bar EMA from the 15-minute chart, but it does not add much and it makes the chart cluttered. On my 5-minute charts, I also plot the 20-bar EMA from the 60-minute chart as well, because the market often treats both as support and resistance. I use a 20-bar EMA on my intraday charts. It was only after the market broke strongly to the upside, that traders concluded that the price was trending up (instead of temporarily bouncing in a bear trend). Even though the pattern was still a pullback in a bear trend, the bulls were owning a lot of bars. That meant that a resumption of the bear trend was more likely than a reversal into a bull trend.īut all of those bars that worked slowly higher in the bear flag indicated that the bulls were relentless. When the bull trend was beginning, the chart was still in a bear flag. The bull trend began at the bear low, but the first 5 to 10 bars of the bull were weak and were more likely part of a bear flag. It is common to see a bear flag continue to pull back higher and higher, and then suddenly the market breaks out to the upside, and converts the bear flag into a bull trend (a bull breakout above a bear flag). They refer to the bounce as a bear flag or a pullback, which means they believe it is temporary and that the bear trend is still intact. Although a trend cannot be present without price moving up or down, in some trends, time can be more important than price, especially early on.įor example, if there is a bear trend and the market drifts up for a few bars, traders expect the bear trend to resume soon. The dimensions are variables and both contribute to a trend. All 2-dimensional charts have at least two dimensions. What type of chart is a 5-minute chart? It is usually incorrectly called a price chart. Technical traders look for repeating patterns that help them anticipate what the market might do next. They are simply a record of the trades that have taken place. The reason it does not matter is that they all show the same thing. Some prefer charts based on time, and others prefer charts based on ticks, volume, or other factors. It does not matter what type of chart a trader uses. I have a second laptop that I use for my Trading Room, and it additionally has thumbnail windows of the 15- and 60-minute Emini charts, which I use for teaching purposes in the trading room. I sometimes look at 60-minute, daily, weekly, and monthly charts. Only need one chartĭuring 99% of the day, I am looking at a single 5-minute chart, which is usually the Emini, but I also sometimes trade Forex markets, bond futures, crude oil, natural gas, stocks, and options. The dashed line is the EMA of the 20-bar EMA from the 60-minute chart, but I wrote the indicator in a way that allows me to plot it on the 5-minute chart (I put the TradeStation EasyLanguage code below). The solid blue line is the 20-bar EMA of the 5-minute chart. With experience, you might see potential trades on almost every bar on the chart! My chart for day trading the 5-minute Emini has two exponential moving averages (EMAs), each based on 20 bars. Just print out a 5-minute chart of any market at the end of the day and you will see many trades. A trader does not need any more than this to make money. It has my charts and a trading platform from one or two brokers. Although it might be hard to believe, my day trading setup uses only a single 13″ laptop for my trading.
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