Time frame diversification
Ever been in the situation of missing out on a move. Or worse, having forecast the markets direction perfectly and still not having managed to extract money. Well you are not alone. Many stare upon their computer screens and cant quite figure out a way to join a directional move. And similarly, short the top and buy the bottom of a sideways range. Now there might be many reasons of why results are poor even so you predicted the direction of the market right. If one only has a well developed directional market strategy, one obviously struggles with sideways ranges-(which is what the markets do the majority of the time). And of course vise versa.The honest truth so is that the best in their field might find themselves “tricked” by the market, to have missed a move and are disciplined enough not to chase a trade. It is common to not be able to catch a perceived leg of the market. There is one remedy so : Time frame diversification.
What is a directional trade in one time frame, might still be a range trade in another time frame.
To solve the first mentioned dilemma. Even if you might not have caught the big time frame low entry point you can still take many directional legs in smaller time frames. Or even if ya get spiked out in an choppy environment many times in a larger time frame you might still be able to take out the larger junks of a move.
So in short the idea here is to have various trades on in various time frames. In addition this provides for an edge in seeing more clearly which time fame participants are on what side of the market. Consequently this prismatic view allows for staying out of the market when larger players are at a point entering the market against the direction of your trade. Moreover this in general is also a good approach for good exit timing. Recent events of our own trading make for a good example of what we try to illustrate:
Daily chart of BTC/USDT, 3rd of July 2019, larger time frame entry:
Bitcoin in Tether US, daily chart as of July 3rd 2019
We went aggressively long after a strong retracement starting near the 10k level. Positioned well for a long term hold we took as usual quick profits to reduce risk.
BTC/USDT, daily chart- 07/08/2019, “fearless”:
Bitcoin in Tether US, daily chart as of July 8th 2019
The next retracement was deep, but left us emotionally untouched. This mainly due to a breakeven stop and early profit taking, which has us exposed to the market with the markets winnings only. A great way to continue following the upthrust that followed.
No need for greed so we took conservatively target profits again once we came close to the next resistance zone. Liquidation into a volume upthrust.
5 minute chart of BTC/USDT – 07/08/2019, lower time frame reload efforts:
Bitcoin in Tether US, 5 minute chart as of July 8th 2019
No such luck so on our attempts to reload the position with multiple attempts on lower time frames.
On our first try a nasty sell spike successfully took out our stop.
Our next try was not ideally timed. Our stop got nicked literally on low tick.(You find all these trades large time frame and short time frame, posted in real time on our telegram channel)
And the final attempt missed its first financing target by 3 ticks and after that also got stopped out by choppy markets, right before a huge move up.
Were there huge losses accumulated? No, but…
Chart of BTC/USDT – 07/09/2019, strong move up:
Bitcoin in Tether US, 5 minute chart as of July 9th 2019
…how would we have felt without knowing to be in this move on the larger time frame? Emotions would have flared up seeing such an advance of price. Especially having foreseen it and only due to some small mishaps, of typical execution problems, not being a part of this trade.
BTC/USDT, daily chart- 07/10/2019, “all out”:
Bitcoin in Tether US, daily chart as of July 10th 2019
On the larger time frame:
Eventually, without much greed but simply into the next resistance: all out.
Daily chart of BTC/USDT, 14th of July 2019, back to entry levels:
Bitcoin in Tether US, daily chart as of July 14th 2019
To catch a 3k point move like this time frame diversification is simply a way of an approach that reduces risk and allows for a higher chance to be part of such an nice price advance. One covers multiple spaces of risk if trading this way.
At these levels of the bitcoin market we see prices sitting at the bottom of a sideways range. Long entries, after a double bottom has formed on the daily chart, are another opportune scenario to try ones skills to be part of the winners circle.
Join our free Telegram Group :https://t.me/joinchat/HGe22hDDEEl0LvFGAgEZ9g
All published information represents the opinion and analysis of Mr Korbinian Koller & his partners, based on data available to him, at the time of writing. Mr. Koller’s opinions are his own and are not a recommendation or an offer to buy or sell securities. Mr. Koller is an independent analyst who receives no compensation of any kind from any groups, individuals or corporations. As trading and investing in any financial markets may involve serious risk of loss, Mr. Koller recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction and do your own due diligence and research when making any kind of a transaction with financial ramifications.
Although a qualified and experienced stock market analyst, Korbinian Koller is not a Registered Securities Advisor. Therefore Mr. Koller’s opinions on the market and stocks can only be construed as a solicitation to buy and sell securities when they are subject to the prior approval and endorsement of a Registered Securities Advisor operating in accordance with the appropriate regulations in your area of jurisdiction. Past results are not necessarily indicative of future results. The passing on and reproduction of this report, analysis or information within the membership area is only legal with a written permission of the author.
Important Trading Risks and Earnings Disclaimers - Terms of Use
RISK DISCLAIMER: All forms of trading carry a high level of risk so you should only speculate with money you can afford to lose. You can lose more than your initial deposit and stake. Please ensure your chosen method matches your investment objectives, familiarize yourself with the risks involved and if necessary seek independent advice.
U.S. Government Required Disclaimer - Commodity Futures Trading Commission. Trading financial instruments of any kind including options, futures and securities have large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the options, futures and stock markets. Don't trade with money you can't afford to lose.
NFA and CTFC Required Disclaimers: Trading in the Foreign Exchange market is a challenging opportunity where above average returns are available for educated and experienced investors who are willing to take above average risk. However, before deciding to participate in Foreign Exchange (FX) trading, you should carefully consider your investment objectives, level of experience and risk appetite. Do not invest money you cannot afford to lose.
EARNINGS DISCLAIMER: EVERY EFFORT HAS BEEN MADE TO ACCURATELY REPRESENT THIS PRODUCT AND ITS POTENTIAL. THERE IS NO GUARANTEE THAT YOU WILL EARN ANY MONEY USING THE TECHNIQUES, IDEAS OR PRODUCTS PRESENTED. EXAMPLES PRESENTED ARE NOT TO BE INTERPRETED AS A PROMISE OR GUARANTEE OF EARNINGS.
CFTC RULE 4.41 - HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAN ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN.
All information presented or any product purchased from this website is for educational and research purposes only and is not intended to provide financial advice. Any statement about profits or income, expressed or implied, does not represent a guarantee. This presentation is neither a solicitation nor an offer to Buy/Sell options, futures stocks or securities. No representation is being made that any information you receive will or is likely to achieve profits or losses similar to those discussed on this website. The past performance of any trading system or methodology is not necessarily indicative of future results. Please use common sense. Get the advice of a competent financial advisor before investing your money in any financial instrument.
Terms of Use: Your use of this educational website indicates your acceptance of these disclaimers. In addition, you agree to hold harmless the publisher and instructors personally and collectively for any losses of capital, if any, that may result from the use of the information. In other words, you must make your own decisions, be responsible for your own decisions and trade at your own risk.