Are bigger timeframes really less noisy?

If you select your timeframe for a trading system there are many things to consider: is it noisy, does it give good trading signals, how far should I put my stoploss and can my strategy take this if I only want to risk a certain % of my account per trade. I think it makes sense not to risk more than 2% per trade. You should calculate this how many pips that are for you (depending on the €'s or $'s in your account and depending on how much leverage you use).

There are many methods you can use for stoploss. The turtles used 2 ATR's, other people use a set number (like 15 pips for example), but I think the stoploss method should incorporate two things: volatility and p&l. So after you've done this and you have extensively backtested and forward-tested your trading system on demo, you can go ahead and launch. But we're getting off topic. The question here was: are longer timeframes better for trading or not?

So I came up with a small tool to calculate the easiest statistic you could imagine (no Hurst for now). If a bar is a red bar (the close is below the open), how big a chance do you have (according to the timeseries you put the tool on) that the next bar will also be a red bar, and if a bar is a green bar (close is above the open), how much % chance do you have that the next bar will be a green one too? If you put this in Metatrader, and you start flipping through the different timeframes, and you go from high to low (from 1month, to 1 week, to daily etc. to 1 minute) you'll see something peculiar appearing: I call it the complexity structure (I'm sure there's a scientific name for this but I just don't care). I added both %'s and called the result 2 bar Trend probability. Normally you would think that the real small timeframes (like the 1minute chart or the '5) would exhibit low 2 bar-trending behaviour, and that this would linearly increase: a bigger timeframe gives less 2 bar noise, and more 2 bar trends. But this is not always the case!

Some currency pairs (this changes so don't expect me to name them) exhibit a complexity structure that is not linear: the maximum 2 bar trend % increases all the way up to e.g. the 4h chart, but then it is flat or it decreases gradually. In that case there is no merit in trading the larger timeframes (because you think they'll give better signals), and you're better off trading the smaller ones: it becomes a trade-off between decrease in 2 bar trending probability and smaller timeframes. Smaller timeframes are better because they give you more trading signals, but they are worse because they have a tendency to be noisy, but it is always dangerous to generalize and this is a nice example.

p.s.: imagine a casino with a roulette wheel with 50 boxes, no double 0 and 27 red boxes and 23 green ones, would you take the bet? When looking at the large timeframes, some of the 2 bar probability %'s are above 50 %, some even at 54%: the simple trading strategy would be to sell when a bar closes down and buy when a bar closes up, with a payoff % of 54, and a per-trade payoff of ... I would take the bet; divide my dollars into 1 cent pieces and scale my betting money according to the Kelly Criterion.