By: Johnathon Fox
When most people come to Forex trading they imagine a career where they can make buckets of money and also have all the free time in the world. What tends to happen is these same traders become obsessed with the markets and instead of having more free time, every waking minute they spend in front of a screen! They spend even less time with their families than they did before they came to trading.
Trading doesn’t have to be like this, and it doesn’t have to take over your life. Traders need to keep in their mind why they came to Forex in the first place and go about using a strategy that gives them their time back.
There is an approach that gives traders the above mentioned luxury. This method entails only trading the larger charts on the weekly and daily time frames.
Benefits to Trading the Daily Chart
When traders are learning to trade the Forex market it is advised that they stick the longer term time frames such as the weekly and daily charts. This rule doesn’t have to belong to only the beginner traders. Many people have jobs that prevent them from watching their charts for hours on end, and what spare time they do have they wish to spend with their family.
Trading the weekly and daily charts has the following benefits:
Trading outside the “noise”. Trading the daily charts allows traders to more accurately determine the flow and trend of the markets without the wild swings the intraday charts such as the 5min and 15min charts are prone to. Small times frames such as the 5min chart can react with extreme volatility whipping traders out of their positions making it hard to profit even if they do pick the correct direction.
Lifestyle. Traders can look at the charts once at the end of the daily chart close and make entries, manage trades or take profit from existing trades. There is no reason to watch trades for hours on end. All the trader must do is check in once each candle is closed every 24 hours.
People can keep their day job. Trading the daily charts allows traders to place trades once a day and then go about their normal life. There is no requirement to watch the screen all day long. The market has to move and do its thing and there is no reason for the trader to watch this providing they have their targets and stops in place.
Simplicity and easy. Trading the daily time frames is very straight forward compared to making trades on a fast moving intraday chart. Traders have time to assess and make up their minds on a particular trade before entering or exiting.
Stick to the Weekly and Daily charts
Trading the daily charts give traders what they came to trading for. They get a chance to make accurate trades and at the same time not have to spend obscene amounts of time sitting in front of a screen going crazy!
It is highly recommended that new traders stick to trading the longer time frame charts. It is important for traders to get the correct processes down before they contemplate going down to smaller intraday charts. Trading the daily and weekly charts allows traders the time they need to get the correct processes in place and perfect their method. This can be extremely hard on small charts such as the 5 min because even seconds spent making up your mind could cost you money.
Once a trader has become profitable in the daily and weekly charts over a period of a minimum 6 months they can start thinking about taking their trading method and applying it to the intraday charts such as the 4hr. The same method is then to be used. Traders should prove themselves profitable on the 4hr chart before contemplating trading on the 1hr chart. This method of moving down the time frames can be used until the trader is content with the tine frames they are trading.
Most traders find that after becoming successful on the daily and weekly charts they feel no need to move down to the smaller charts. The reason for this is they have the best trading world possible. They have the potential to make money but are also able to spend time away from the computer doing things they love.