How I Trade
When I read through the forums, I see
many opinions on different trading styles. Most of these people
are talking from a personal point of view, and often confuse
opinion for truth. It's truth as they see it. In time, many
of these people will mellow and realize the error of their
opinions. Or they will leave Forex with a new opinion that
Forex is to blame. Forums are great, but suffer greatly with
an imbalance of experience levels. Most experienced traders
do not post on forums.
The system you trade, is a reflection of you.
One persons trash is another persons treasure.
I trade successfully in lower timeframe's.
I use basic price action, support and resistance levels and
I watch a true ECN price feed** where every tick represents
a bunch of orders**. Using a true price feed, I can see orders
coming in and out of the market, not literally, but by the
way it moves at certain levels. This information reveals a
lot, which the untrained eye will simply not see. What most
will dismiss as "noise" I see as the market.
Some will say there is too much "noise"
on the lower timeframe's. But the lower timeframe's are closer
to revealing what the true market is doing. Don't get me wrong,
I have no problems with a 4 Hour system, but let's be clear.
A 4 Hour bar contains 4 pieces of information to represent
a 4 hour period; high, low, open, close. That's not much.
Before that 4 Hour bar is closed I will have made my days
trade, and be eating breakfast. In a 50 pip long, 4 hour bar,
it may have bounced between two pivots 10 times. A 4 Hour
bar will not tell you that.
I wonder if those that claim the 15,5 and 1
minute charts are just noise, consider that it is possible
to squash a 5 minute chart to see 3 or 4 days data in one
window. Compare a squashed 5 minute chart showing 3 days,
with a 4 hour chart showing 3 days and tell me which one tells
you more and contains more information. Look at the 2 following
Squashed 5 Minute Chart showing 3 days. Look at that detail!
Look at all those opportunities.
4 Hour Chart Showing 3 days - No idea what happend in each
of those 4 Hours?
On the above charts, look at the last day on
the 4 Hour chart (6 bars in from the right), compared to the
last day on the 5 minute chart. The 4 hour chart would be
considered flat and no signals would be possible in most systems.
Now look at the 5 minute chart. I count 6 decent and very
tradeable swings. I would catch one of those swings and be
done for the day.
The eyes with which one looks at a 4 Hour system,
and a 1 minute system, have to be completely different eyes.
A 1 minute system works in a different way to a 4 hour system.
You cannot judge one system, with the other systems rules.
Both can be profitable. So it all comes down to how you like
to trade, and what works for you.
I like the freedom of trading for 1 to 4 hours
in the morning, catching my 30 pips, closing my charts, and
forgetting about the forex market until 7:30am the next morning.
I don't have to check my trades every 4 hours for entry or
exit. I don't have to be constantly worrying about missing
the entry for the 1 or 2 setups this week.
** Please note that almost every 'Market
maker' broker does not display a true ECN feed. They display
a 'smoothed' version of it. For example, let's say that the
price jumps up and down 3 pips in a 1 second period. If the
price is smoothed, it will not display this information. As
far as you are concerned, the price just held there. At the
same time, on my ECN feed, I'm seeing it drop down 3 pips
to a pivot and snap up VERY FAST! I see this happen 10 times
in a 3 second period. Drop SNAP! Drop SNAP! Drop SNAP! Drop
SNAP! This tells me that buy orders are being put in at that
level, and lots of them. That is valuable information you
will never see on a market maker, smoothed price feed. If
you trade a 4 Hour system this has no meaning to you, if you
trade off resistance levels on a 1 minute chart, this information
is absolutely priceless!
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