I am looking at 5 minute candles, been doing this for some days now, did not go below to 3 minutes or lesser time candles.
I am trying to find an entry in the 5 minute candle. I am getting it after observing the price and after some indication from the candle, but the entry as you know is not perfect, not even good. It is okay, because for the most part, I am closing the trade for profit.
So is there a way to find entry in a 5 minute candle, or it is impossible, so one should look at lesser time frame candles, 3 minute, 2 minute or even 1 minute? Or any entry in a 5 minute candle is okay until the higher time frame say 15 minute or 30 minute is trending the same direction?
I know there are a lot of moving parts that even I know of, but I would like to know if there is anything that you guys can tell about 5 minute candle entry.
Take many trades, look at results. Not perfect but only way to check if there is possible edge.
There is nothing wrong with 5m and nothing magical either. You can use 5min bars and hold only for 1 bar, and 3min bars and hold all day. This is just a way of structuring things and then you need to have an idea to test.
You can get edges using 5min and you will likely see similar results with 3min as its so close. You can get edges looking at only 1 timeframe. And nothing wrong with combining it it helps ( it can ).
Look for momentum edges or mean reversion or something like that for example. Can you separate momentum from mean reversion ? What happens when markets are dead etc etc etc. Those ideas can come from other sources and/or from observation. But once you have idea, need to test it.
Beyond that, i cant share edges that i know obviously. And i believe that anyway for long term survival one must be able to discover as well as maintain edges.
If you need ideas to test and have none, then look at some botmakers like square off. Just take their published ideas as starting point and work with it. Not saying this is the best way, but it can get you started. Some of their systems seemed to have stopped working too.
Better way might be to read books + try to apply every day with small capital and with time you will start to have your own ideas. Toughest part initially is being able to test everything instead of guesswork.
Data issues happen, its part of life. One can backfill multiple times a day to mitigate some of this ( so that data before signal is almost same). But things like entry/exit triggering without showing up in data will happen too if you use breakout orders.
This is one of the reasons why live perf is worse off than backtest. But this is not a deal breaker, I am done just fine and intraday returns ( after all of this stuff) are likely better than overnight (from what i have seen so far) - but with less scalability/more work etc as tradeoff.
Scalping is probably a bad idea if you mean quick entry and exit within say 30mins. Costs are too high, perhaps ok in options dunno. But, test it yourself.
Already told you its possible. 5m is fine, i use it too. Just 5m is enough, no need to add complications until needed. Again, this is just a way to structure data. We need to translate ideas into rules. Keep tests as simple as possible, simple things work. Just one or two conditions are usually enough for getting core edge. Later on we can refine and shape it if possible ( need large sample for this).
After a good breakout with retest from resistence, role of MACD comes into play. MACD indicator, applied on tradingview have 3 things to look for:
• MA Crossover
• Histogram and MA Divergence
If you find after entry that there is negative crossover in MA, and histogram is moving towards negative (obviously if price is going up and vice versa), you should exit if price is breaking its support or you can even exit before that.
Talking about divergence, if there is negative divergence if price moving up or if there is positive divergence with price moving down, then you should take exit if price croses its support.
You can also look for bigger TF to understand overall when price is moving.
Hope it helps or you can suggest me anything regarding it.
Best thing about patterns and candlestick is it forms patterns/Support resistance in any time frame. Just take any liquid stock and change the candle form 1M, 1W, 1D,1H,15min,5min,3min,2min,1min. Majority of the traders use these time frames for trading ,for intraday trade good timeframe is 15 mins,5min,1min( some even go for 3,2min as well).
I feel one should start with higher timeframe first before going lowertime frame to teach your mind decision making. Adjust your quantity accordingly. so go for 15 mins if 5 mins doesn’t seems comfortable.
If you feel something you are not getting comfortable just increase the timeframe or adjust the quantity accordingly.
Can easily backtest on excel, Zerodha provide data on excel through kite. Can backtest with any setup.
There is no right or wrong entry just risk /reward in the trade. Losing money is always larger loss than opportunity miss.
People also use pyramiding technique as well eg: if you are currently going for X quantities the punch .5X first and the .25X,.25X after some time.
People trade in nanosec(HFT trades) , secs, mins, hours,daily ,monthly ,yearly timeframe as well . So , it very personal thing , nothing right or wrong. If 5 mins is comfortable then just master the 5 mins , become the best in it!After few 100 or trades or so you will understand best and worst part of it