08 December 2016

Can The One Minute Chart Help Traders ?

It is possible to consider the one minute time frame on the chart important for a number of reasons. For example, that it can show patterns forming which may point to the potential destablisation of a trend on a higher time frame. It may be that as well as being too sensitive it can also be sensitive in cases where other time frames are not, to influences in the market.

It is the case that an effect on the market may have an immediate response but the outcome over time may play out in different ways. So the one minute chart can be seen as a potential gauge for a longer term effect. However against this must be factored in noise from being too sensitive and also a time factor.

This is that in each move a chart makes, to some extent it may reflect a future expectation of where it will move to. This adds complexity to moves in leveraged trading, and also complex reactions up and down. However these moves tend to be established and perhaps stabilised by recurrences, simply by the fact that they are recurring, for example value levels and even more generally, big figures.

So the patterns of moves may reflect potential future moves, or at least expectations of them, but this can be rapidly diminished by the market, except where some effects may allow for more extended patterns of future value contained within more generalised moves.

Thus the one minute chart can help the trader by revealing detail on candlestick charts about the nature of a trend and it may in certain situations show signs of changes in the market. The nature of events on the market is not usually clear cut, so the expectation of a clear relationship between input (such as a news event) and output (such as a directional move) may not be borne out. But this does not mean such events cannot be examined to narrow to the extent this is possible a set of possible outcomes, and a one minute chart may help with this.

A one minute chart can then be useful in news trading, as this is a time where close examination of what the market is doing can be useful, as strong moves can happen quickly. This can be the case before the news event and at the news release, as the behavior of the asset in question as it approaches a past support or resistance can narrow the range of possible outcomes. It may or may not be less true after the event, as more generalised reactions could come into play, like pull backs in patterns, elongated by volatility, but not undone by it.