I use mostly 5 minute candlestick chart, and/or daily charts for FX trading. I dont less than that, ex. 1 minutes candlestick charts.. What does you guys use? What time frame is you trading and methodology based on? After my observations, technical patters we see in daily charts have almost the same type of validity as intraday charts? or do they!? Thanks for any answers,opinons,comments..etc..
I ONLY use daily charts, don't care trading intraday. Generally, intraday patterns are less reliable than daily ones. More even so in Forex, remember large institutions dominate the currency markets, and they manage so large quantities of money that they can't easily get in/out in a single day. Remember that retail Forex traders don't move the market at all due to Bucketing.
Doh, where do you think marketmakers hedge their nett exposure? You still haven't quite got the hang of how the market works have you crgarcia, heaven knows you've been told enough times! Regards the OP's question, I use 1hr and 15m charts. Similar patterns exist in all time frames and are equally reliable but obviously intraday charts highlight smaller intraday moves whereas on daily charts they're not so noticable. It's a trade off, higher time frames require larger stops and comparable targets, intraday charts smaller stops and targets. Anything less than 5m is just noise in my opinion but there are traders who can make them work.
you can trade any time frame , Just depends on how much of a stop you can handle . ie daily you need stops around 100 pips and 15 min you can get away with 30 pips . They say 4hrs+ is better but i hate leaving positions open over night unless in a profit with a b\e stop to use daily charts you realy have to be confident in your system seeing it go down 100 pips and not exiting .
I think in order to have the best perspective on what a price movement is going to do , its really essential to look at all time frames,simultaneously,back and forth. There are things you see on one that you cant see on another.I find the 1 hour chart is a good place to set a trading plan (intraday) and from there , I spend more time on the 15 minute,10,and 5 during trades....but it also depends on the waves that are happening at the time.... for example, when you see chopping waves that are consistently moving in a 15 minute rhythem...the 5,10,and 15 minute charts can give good feeling and then, the 1 minute chart ,used at the right moment can show the exit and entry points. ...........but of course for a position trader....the daily may be the main idea chart ,4 hour the game plan, and the 1 hour the entry indicator, .... other factors include the vo;ume and speed of the PA, .... wild action might need a step back from 5 to 15 minute frames if it shows you a more clear picture. its a good question. I wish I didnt start answering....its becoming too complex the more I write. in short, theres no simple singular time frame to stick to like a favorite . they should all be looked at . whatever shows the clearest picture.IMO
When your trading smaller time frame, you have to use much more capital into work, and off course tighter stops, But isnt it riskier, if ex. a sudden news come, and the FX cross move 3-4%.. ?? I assume the stops with get filled, or?