Trading 5 min charts has more money-making opportunities?
You can be trained to trade in any timeframe?
Think again. I also went through what most aspiring traders went through. I used to think trading the 5 min timeframe was suitable for me because of the adrenaline rush, as there were more entry opportunities. Most men like this type of adrenaline rush
However, I still feel that trading the shorter timeframe is good for brushing up trading skills. After trading the 5 min timeframe for a period of time, my observations tell me that the 5 min timeframe may not be suitable for me. Let me share my observations with you.
I have a full-time nine-to-five job. Most aspiring traders do (some own businesses of course). I realized I have been missing out on many good trade setups because they happen during the time when I am working! Good trades are hard to come by. Missing out on good trades really takes a toll on my psychology.
I did try to force myself to trade while working. I adjusted my work schedule and tasks such that I would be able to monitor the charts as frequent as I can. You think this helped? NO! It made things worse. On one hand, I felt stress from my job. On the other hand, because it wasn’t easy for me to find time to monitor the charts, somehow my brain started to see things. I saw trade setups that were not there! As a result, my trade quality took a hit.
You think I am able to trade after work? Ya, ya…forex is a 24-hour market right? Bad news. In my part of the world, by the time I reach home after work, it is almost close to the US market opening hours. Prior to the US market opening and even during the US market hours, there are often market-moving economic news announcement that cause the forex market to behave haphazardly. We are often taught not to trade around high impact economic news announcements right?
Well, I can trade into the wee hours of the night right? Sad to say, the forex 5 min charts typically quietens down after around 10:30 EST. There may be some movement around 12:00 EST when the London market closes. After which, I had to wait all the way till 16:00 EST (around 4 am local time) for possible movements on the 5 min charts. Imagine you are home after a tiring day at work and got to stare hard at the computer screen all the while. Stressful isn’t it? Both physically and psychologically.
A fellow trading course mate also showed me the evidence that a suitable timeframe is crucial to one’s trading success. We learnt the same 5 min chart trading strategies but he had much greater successes! Upon probing, I learnt that his working hours are totally opposite of mine! He works in the night only and has all morning and afternoon to trade.
Unfortunately, there is no one magic formula to determine which timeframe is the most suitable for you. The only way is to try trading the timeframe and evaluate yourself. Everyone’s working hours is different, isn’t it?
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The only way to be truely satisfied is to do what you believe is great work and the only way to do great work is to love what you do… - Steve Jobs
There are 4 traders in my team:
1 of them has been working as a bank forex trader for 30 years,
another 1 has been working as a bank forex trader for 20 plus years.
We often discuss about the “forex gurus” advertised in the newspaper. They said he have been in the industry for 20 plus years, and they know almost everyone of them (since they also trade in inter-bank), but they have not seen those “forex gurus” before.
That really puzzles us.