Aha!

As I advanced in my learning, I began to see and absorb more and more about using multiple time frames in my trading.  Most advice was along the lines of using at least two different time interval charts and ensuring that trades were always made in the direction of the Higher Time Frame (HTF).

Drummond Geometry pounded this concept into me more than any other training course; DG advocates the use of a Focus Time Frame (FTF), Higher Time Frame (HTF), and Lower Time Frame (LTF).  Each has its purpose: The HTF rules; you must trade in the direction of it and respect its support & resistance levels.  The FTF is what you are actually trading, and the LTF is mostly for timing.  I never mastered that, but it made perfect sense to me.

All the testimonials from folks who have mastered the art of multiple time frame trading say something like, "this technique has changed my life" or "this is the holy grail of trading."  So, I have been seriously disappointed in my inability to prosper from the discipline.

After my aha moment yesterday, I think I may have been missing the point.  The images in yesterday's post clearly show that I was not trading a specific time period;  I was just trading the ES.  Rather than using the HTF for trend and S&R or using the LTF for timing, I was using them all for the same purpose -- to make sure they were harmonious before taking the trade.  This is akin to driving a car.  You're driving only one car, but you need to look at least behind, ahead, and to the side before you make a move so that you don't get hit by a truck.

I was looking for what Joe DiNapoli called "confluence" in his book about Fibonacci trading.  When I took that trade late yesterday afternoon, I wasn't thinking in terms of "trading the 1500 tick chart, using the 4500 for trend and the 500 for timing."  I was just thinking about confluence, harmony, complementary events, evidence that there was no disparity among the three time frames.  That was the aha moment.

My tendency has always been to use any of the techniques I have learned in a very systematic way.  The rigid rules of a system can get in the way of common sense, and I think that has been a big problem for me.  Consider this: If I had adhered to the systematic method of using the HTF for trend and support & resistance, I couldn't have taken that long trade shown below.  It would have been against the rules.

I didn't break the rules by going long.  I just rearranged them by using less compartmentalization in my thinking.  Yes, the HTF trend was down at the time; and the chart showed some resistance just overhead.  However, the momentum exhaustion supported the long trade; and the signals on the LTF were also supportive.  All three charts were screaming, "Up!" at the same time.  As it turned out, they were right.

Will this make a difference for me?  I think it will, but we'll see.  Right now, I'm counting it as a giant step forward.