Good Advice
trade over the longer term, daily, weekly, monthly timeperiods.
profitability decreases with trading timeframe.
what will work on an inraday basis could work even better on the higher timeframes.
trade based on your circumstaces, dont change them to trade.
Excellent advice Jiggly.
Her's the skinny of trading different TF ... at least from my perspective.
Many traders shy away from trading the 1H and 4H and Daily TF for one simple reason - they don't have the capital to fund the account required to correctly place stops. In simpler terms, the margin requirement in the higher TF costs more to place a SL at a half-decent distance from entry.
I fully understand this issue - I have been there. On the daily TF you can expect to require in excess of 200-pip SL - or more if basing your stops on the Daily ATR (Average True Range). Newbies don't generally like that - they want action, and do not have the patience to wait for a trade to mature in these longer TF. Nor do they have the patience to save for a larger account, or at least the confidence to use a larger account size.
So - many traders opt to trade the lower TF - 30 min or 15 min and down to 5 min and even 1 minute (if you are loaded with enough caffeine) because of account size limitations. In so doing, they fail to develop skills necessary to use when trading longer TF.
Included in the skills needed for the longer TF:
1) Psychological ability to handle a growing profit or loss in double or triple digits, or even larger
2) Inability to handle price fluctuations that go with drawdown and "normal" noise for the TF traded
3) Lack of patience required in allowing price to "come to you" in the longer TF
4) Lack of knowledge of the correct use of Indicators, and Indicator settings, for the specific TF selected.
Point #3 is can be a remnant of the psychology traders developed in learning to "hit the button" quickly when their entry/exit signals have been triggered.
Some trading educators highly recommend that traders begin their trading lessons on the Daily and Weekly TF, and progress downwards to the faster 4H and Hourly, as skills improve. This is logical and consistent with the principles of learning.
Pushing a V8 to it's limits at Brands Hatch is not achieved the day you gain your learner's permit is it? (Not if you wish to stay wheels-down it isn't!) and the same goes for trading. Taking it slowly, and with enough attention to the quirks of the TF to allow the "aha" lights to begin to burn, is fundamental to a successful grounding in FX trading.
That's just my view - there may be some who agree, and some not in accord with that. But whatever your TF, a period of apprenticeship must be served, else you will be saving for your next account faster than you can say "Check-mate!"
The good news is that whatever knowledge you may have accumulated through your experiences in the faster TF, need not be discarded nor wasted. It can be employed in the other TF, but first the trader needs to undergo a change in mindset.
In other words, he needs to do some head work.
I used to work as a clinical Nurse in a Gaol. One of the inmates due for release came up to me one day in the clinic, and asked me to "give him something" to "take away the urge to use" narcotics and amphetamines. He was crying, and he explained to me that when he got out he would be going back to his family and cousins., who were all users and dealers.
I unfortunately had to tell him that there was no such thing as "something to stop his desire for using" but I could help him in other ways. I suggested to him that he avoid his family until he felt strong enough to manage his own life free of the need to "belong" through succumbing to peer pressure. He could not do that - his family and friends were expecting him home.
The other thing I offered him, was to seriously do some "head-work" before going home.
By that I explained to him, that he had to first develop the resolve never to touch these substances again ... not even once. Then he had to put in place a mechanism whereby he could strengthen that resolve, and even have an emergency course of action that he absolutely MUST take if the situation was pressing him to break his new "rules".
I suggested to him to find a counsellor, and some people who had also beaten the habit and to spend some time in their company too. This would encourage him, as well as wean him from his dependency on his family and friends, who he knew already, would only lead him back to old ways.
He knew what I was saying, and left the clinic torn both ways. I never did find out what his decision was, nor how he fared on release from prison. But he did have the tools (knowledge) and it is my earnest hope that he was able to pull back from what he knew was destroying him, and find a decent life outside of using - at least in the criminal sense.
The analogy applies full well to trading.
If you are prepared to do the head work and make the effort to stop what you are doing (if it is not working) and get into something that does work, you will be on the path to a new and hopefully more rewarding trading career.
I am not trying to show myself to be a smartie here - I freely admit I too am on the journey to trading success. But I am very very close to the final stage. I know now what works and what does not - for me. I have friends who successfully scalp - but for the life of me I just can't do it.
More than anything else, I know WHY I have been unsuccessful (I refuse to use the word "failed" in the context of my trading journey) up to this point. Those reasons are more to do with impatience and greed than with any other qualities, and like an alcoholic, for every trade I attempt, from today forwards, I need to be on my guard against these two enemies.
Longer TF trading can be very satisfying and rewarding. Discard the belief that is is slow, boring and maybe like watching nails rust! Yes - it may be a bit like that. But nothing beats the thrill of watching a position close to its drawdown limit, come rushing back in the beginning of the London session to make a handsome profit for you.
This not only vindicates your strategy, but it validates you as a trader, and confirms that your resolve to patiently apply your system rules, was correct. It is hard to achieve that as a scalper for me.
If it is the same for you - why not investigate the longer term style anew? You may be pleasantly surprised, that what you have been brushing aside for so long is even closer to what you are seeking psychologcally from trading than you ever imagined.
As usual ... an essay - sorry folks!
But I leave you with the memory of the Brands Hatch analogy in this attachment!
With best wishes
Ivan
