Momentum on M1 versus M3: same entries, different noise

[FXS London Scalper]

Running the same momentum entry on M1 and M3 side by side shows quickly how much of a signal is noise. Take an entry on GBPUSD such as a close beyond the previous five bars' high or low with a body at least 70% of the bar range, and log both timeframes for several weeks.

What to expect and measure:

• M1 will give several times as many signals, many in clusters within a few minutes that you'd never trade separately. Count clusters as one.
• M3 signals are fewer. The question is whether each has cleaner follow-through: compare the share reaching 1R.
• Stops on M3 will be wider, so spread is a smaller share of risk.

The cost effect is easy to calculate. With 0.9 pips all-in, a 4.5 pip stop loses 20% of risk to costs; a 7 pip stop loses about 13%. That alone can tilt R per trade towards M3 even if hit rates were equal.

In pips per day the comparison may come out closer, because M1 has more trades. Decide in advance which measure you care about.

M3 isn't in MT4's standard list, but MT5 and cTrader have it built in.

Does anyone use M2 or M3 for scalping? Does the cleaner signal hold up over a long period?