Your Single Best Piece of Advice

Can anyone give me any idea what the most common trading time-frame is? Do most people trade short-term or long-term and does either seem to be more profitable?

I know this may seem like a stupid question! The reason I ask is I was doing some demo trading last night and I was looking at a very short interval originally (1 minute). I found that to be quite erratic and it was far more difficult to spot any patterns for me, it just moved too fast. I then went on to 30 minutes which I prefer right now.

What are your thoughts?
 
TF is very subjective and you're likely to get a wide variety of answers. But something to bear in mind is that the spread will increase hugely as a percentage of your risk as you go down to lower TF's.
 
Tip: The timeframe chart you may use as an entry trigger isn't necc. the timeframe you are trading.
 
So what you're saying Vorbis if I don't misunderstand is that risk increases substantially on lower TFs(higher volatility, more noise?). As for the spread it's much higher since you're potentially making more shorter term trades and profiting less from them?

nunrgguy could you give me an example of that? I haven't really read anything indicating which TF's you use as triggers vs your trading TF... I definitely haven't developed my own strategy yet
 
I think this is a spoof however ......

In the first instance I would pick a volatile instrument like cable or the euro and demo trade that on M5 whilst referring to M1 for entries and M30/M15 for profit targets. There's no point learning on the higher tf's. Get a good idea of trend etc by looking at an H4 & daily chart before you start. Always put your SL somewhere close and have an overall money management plan that delivers 2 x or more of the cost of your SL - or 2 x Risk. Sometimes, depending on market conditions its better just to head for 2R or 3R and call that quits. Develop some entry criteria and then take every entry, and manage every trade mechanically according to your plan. Only ever move your SL towards your entry point, until you're bringing it on side to a lower TP position.

Then expect to spend about 10,000 hours watching and practicing, bringing in correlation, markets opening, markets closing, news events, options expiry, etc etc until it begins to dawn on you that you can trade, and your account - whether demo or micro - is gently going up.

Then you'll go live and may lose your first account.

After this you'll be aware of the dangers of going on tilt and emotional revenge trading etc - but may still be a sufferer.

Its possible but very hard.











So what you're saying Vorbis if I don't misunderstand is that risk increases substantially on lower TFs(higher volatility, more noise?). As for the spread it's much higher since you're potentially making more shorter term trades and profiting less from them?

nunrgguy could you give me an example of that? I haven't really read anything indicating which TF's you use as triggers vs your trading TF... I definitely haven't developed my own strategy yet
 
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As for the spread it's much higher since you're potentially making more shorter term trades and profiting less from them?

You have to overcome the spread before you move into profit; consider two examples.

If you decide to trade a 4-hour EUR-USD chart with a 2-pip spread and using a 50-pip SL, when you add the spread you are increasing the potential loss by 4%.

If you decide to trade 5-Min EUR-USD using a 10-pip SL and you add the spread, you increase your potential loss by a huge 20%.

There are many other points to consider, such as the number of opportunities that are available, the time you have available, the assumed expectancy of your method, etc.

Van Tharps book - 'trade your way to financial freedom' is a good guide to these subjects.

The issue of increased noise is a debatable one, but mostly seems to make sense. Any single order that hits the market is bound to have more impact on a LTF relatively speaking, but this has to be balanced against the shorter time you are in the market. Some prefer LTF's because they can reduce exposure to risk by getting in and out quickly.

It is all very subjective and down to individual preference. Personally I don't go lower than hourly because I hate having to sit there and stare at it.
 
You've answered my questions quite well. That's what I was thinking although I may not have worded it properly. Essentially on long-term trades the spread is less significant percentage-wise, in your example 2 pips out of 50 instead of 2 out of 10 in short-term.

I think for me I'd, like you, prefer not to have to sit there and micro-manage all the time!

revolution.x you also make some good points such as placing SL's that are close(I've learnt you should always, always, always have a SL) and trading in demo until I become consistently profitable.

Thank you both.
 
Hey guys and gals,

I've been doing research for the past couple months, I've gone through countless forums, posts and even books on fx trading so far. Now I'm wondering, if you could give me only one single piece of advice before I start trading live what would it be? I haven't chosen a broker as of yet, so I suppose you could give me your recommendation on that but I'd prefer almost anything else since I've done my work on that already. Who better to give me tips than a bunch of experts? They say that knowledge is the best weapon you can arm yourself with starting in this industry and with time comes experience. I'm trying to gather as much of that prized knowledge as I can before I start!

PS. I do plan to open a practice account and to test all of my strategies diligently before moving to the next step. I'd just like to glean from the collective expertise as much as I can while I await that next challenge.
anita,
read my intro. i just posted might help try my posted trade i have live trade waiting to get fill on monday if not i will modifiy
good idia to open VIRTUAL account i like optionsexpress , thinkswim is also quit good both have built in virtual account.only thing make sure in real account they allow u to trade SELLING SECURED CALL/PUT. THAT ALL I TRADE. GOOD LUCK
 
bhatia38,

I don't really understand what you're trying to tell me with your post. Sounds a lot like a marketing strategy for one of the two sites you mentioned. Is that possible? What is trading secured CALL/PUT?

Also what makes those sites good to trade on? Don't worry, I don't actually expect a reply, but I'd be happy to get one clarifying what you're trying to tell me!

Thanks
 
So what you're saying Vorbis if I don't misunderstand is that risk increases substantially on lower TFs(higher volatility, more noise?). As for the spread it's much higher since you're potentially making more shorter term trades and profiting less from them?

nunrgguy could you give me an example of that? I haven't really read anything indicating which TF's you use as triggers vs your trading TF... I definitely haven't developed my own strategy yet

An example: you see an engulfing bar at a swing low on a weekly chart. The sucker play is to go long directly on the break of the bar with a huge stop who knows where. It's a sucker play as it's likely to get faded. BUT, you now know that there is supply below and you're looking to get in long at the best price you can - i.e. as close to supply as possible. If smaller TF PA dictates you enter on a break then so be it but you will find price coming back at you a lot doing that. The better entry, if you can get it is for a cheaper price. In life we always want to get whatever it is (as long as it's good) as cheap as we can get it yes? Big momentum moves tend to, for a variety of reasons, get faded. i.e. there's a pullback. Now where do you enter, what dictates where you enter? I'd hazard a guess one thing dictating is PA on smaller timeframes. Don't forget that all a chart shows you is a compressed picture of what happened in the past. Higher TF charts get easier to read because of the greater compression.

OK an example (assuming all is perfect in the world and we win everytime:p), swing low, momentum up on weekly, price pulls back, entry on a 4 hour chart with price above daily open and somewhere pretty close to the weekly low i.e. you might think you're trading the '4 hour timeframe' because you're looking at 4 hour bars but are you? At the end of the day price is price and charts are illusions. Nice illusions that can give us some information about decent price areas where to position ourselves in the market and about market speed from certain price levels.

You can take it even further if you wish, you've got your PA on the 4 hour chart (so we have weekly swing low, weekly momentum, retrace, daily up, 4 hour momentum) now you drop to the 15 minute to time your entry. What are you trading now? 15 minute TF? 4hr timeframe? Weekly timeframe? Of course it's not strctly necc. to do that after you've positioned yourself in the market, if you really are going to hold for weeks there's not much advantage in dropping down to the 15 minute TF for entry, also you CAN just start chucking limits out until you hook a plaice and get a better price than if waiting for a 4 hour bar etc but by doing that you don't know if a level is holding or not at THIS point in time - waiting for the bar shows you if there's any buying there or not.

So, you've made your entry.: Weekly level, daily direction, 4 hour timing. Now, how long are you going to hold for? After price has risen , where is price likely to pull back from? Where are you targetting? Now, potentially you could hold this trade for weeks, that's one way of doing it. The other is to look for where price is likely to pull back from, target those areas and exit there, re-entering on pullback until the move is done, this is how you can, if all goes well of course, pull, say, 400 pips out of a 250 pip move. Another way might be to position manage, adding and subtracting positions based on these price levels, lightning after momentum, adding on retraces and continuing to trade long until you see a reason on the weekly to no longer be trading long.

'I'm trading the 4hr TF trend you say' No, you're not trading ANY timeframe I say. I say you're trading weekly and daily price levels using the higher TF charts to gauge momentum/market speed and price bars from lower TF charts as your entry trigger.
 
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How come when a female turns up on a thread everybody falls over themselves in the constructive and helpful dept. :)
 

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How come when a female turns up on a thread everybody falls over themselves in the constructive and helpful dept. :)

Ultimately, even altruism is a form of selfishness. One way or another, when people are altruistic, they subconsciously or consciously expect some kind of return.

An organism is conditioned by natural selection to act in what it perceives to be its own best interests; only the conception of 'me' or 'mine' varies. The broader the identification, the more empathic/compassionate you are likely to behave.

Xenophobia is the opposite; the identification of someone or something as 'not me or mine' expresses as fear which manifests as hostility; a perceived threat.

This is a drunken ramble which has wandered away from your initial point, but I suppose it's just a long-winded way of saying that men will generally tend to feel more willing to extend aid to a woman than to another man (biologically perceived as a potential competitor). And probably vice-versa.

Of course, on the internet, although I would not cast any doubts on Anitas honesty, anybody can be whatever gender or whatever that they please. This is an entirely artificial identity through which we interact.


Never thought I would find myself saying this Dash, but you've got a nice ass! :)
 
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RE Anita, choose your trades carefully.... i have made the mistake of jumping in to numerous trades for the sake of it, and its not a good thing.... before you take a trade, know why you are taking it
 
I am in fact A MAN mouahaha I've just taken all of your valuable insights and information using a false pretext and I'm proud of it :p

Now that that's out of the way, nunrgguy, your post is very hard to follow, I'm not really getting a clear picture from you. I understand what you're saying about the TF pretty much just being a tool that we can observe and we're not really ever trading "in a timeframe". We're just looking at a particular timeframe at any given time and trying to use visual cues to decide when to trade. The one we choose is more a matter of preference than anything it seems.

Now for my contribution... a little visual representation: (.)(.)

Aren't they nice? lol

In all seriousness though, I thank you kindly for all of your help everyone!
 
Now that that's out of the way, nunrgguy, your post is very hard to follow, I'm not really getting a clear picture from you.

Keep re-reading it is my advice. It's a very good post about how multiple timeframes can affect your trade entry, management and subsequent exit. It's a point not often discussed.
 
I will do so, it's not that I don't understand. I guess it's just the way it's written is like a train of thought and I haven't caught the train yet haha I read another article on how to take advantage of multiple timeframes which has helped to understand as well. I'll pour over it a couple more times just to be sure I get it.

Cheers robster!
 
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