m5 is to close to m1 what does that mean?

[thestart]

can someone explain what you mean when you say m5 is to close to m1 what does that mean thank you

[immy]

can someone explain what you mean when you say m5 is to close to m1 what does that mean thank you

Hi

It means that the M1 level is close to the M5 level. e.g. you're looking at shorting EUR/USD and you have an aims level low at 1.3010. Lets suppose the opposite AIMS level, the upper aims level, where you'd put your Stop Loss is 10 pips away, @ 1.3020 then you will put SL above 1.3020 + spread and 1 pip. (suppose spread is 1pip and buffer is 1 pip then it should be 1.3022

Now lets suppose there is an aims low level to the left of the M1 AIMS level that you are considering to put po under, and lets suppose that aims level is also an M5 AIMS Low level at 1.3008. In this scenarios it would be better to put a PO below The M5 level i.e. 1.3008 less 1 pip buffer @ 1.3007. We take the m5 level so we don't get caught in a trading range and avoid unnecessary whipsaws, not that we wont get whipped at times but we try to not pay rent if we can avoid it.So, your SL Level 1.3022 less PO level 1.3007 means SL = 15pips away. This is acceptable on M1.

Next lets suppose the M5 level is at 1.3002. Now its 8 pips away from M1 AIMS level which is at 1.3010. Hence here you're in a dilemma. If you put PO below M1 level, the m5 level is close and within 7 or 6 pips price might react to m5 level. If you put your PO below M5 at 1.3002 less 1 pip @1.3001, then your SL level on M1, will be more than 15pips i.e. SL aboe M1 uppoer aims level should be 1 pip buffer + spread above @1.3022 and Your PO is at 1.3001. This means your SL in pips is 21 pips away. This might be a bit too big a risk for M1. Now the risk has increased from 15 pips to 21 pips. I say this with all other things remaining the same, you'd rather avoid this situation and look for a clean level where either M1 and M5 leves are the same or there is enough distance between M5 and M1 level so you are able to bring your stop loss to either BE or at least half the risk, assuming you follow Grants Trade Management you'll be happy if there is more than 7pips distance between M1 PO and M5 Leve because at +5 he brings SL to -4.

I hope this helps...

[thestart]

I get it I think. You mean that If we could put a stop @ m1 and be good with the same stop on m5 we give the market the ability to vibrate within m5 and risk still small amount of pips because you are useing m1 and sl for m5 would work to because of where the fractals stopped on m1 and m5 yes. :-bd (whew)

[thestart]

OH and thank you Immy

[thestart]

Hey Immy this is where the widget tool I have would save time you can see the high and lows of booth time frames quickly yes.