Seconds charts: a magnifier, not a solution

[Fairman]

Seconds charts: a magnifier, not a solution

Five-second and ten-second charts attract scalpers. More detail, faster signals, more trades. The charts look rich.

The problem is noise. At this scale, price moves are dominated by the bid-ask bounce and random quote changes. Patterns on a ten-second chart mostly reflect microstructure, not intent.

Indicators calibrated on one-minute data produce erratic signals on seconds charts. Moving averages whip around. Oscillators spend time in extremes without meaning anything.

Costs also bite harder. At a few seconds per trade and several trades per minute, the spread consumes a large part of any gain. A strategy that earns 0.4 pips per trade on average, before costs, is hopeless with a 0.8-pip spread.

Charts like these are most useful for refining entries within a larger context, such as timing the entry after a setup on a one-minute chart.

As a primary trading timeframe, only strategies designed from the start for such conditions, with very low costs, tend to work.

What was the cost per trade, relative to the average gain, on the shortest timeframe tried?