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Long or short term trades

Discussion in 'Beginners Bootcamp' started by knightal, Jul 30, 2010.

  1. knightal

    knightal Private, 1st Class

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    Hi

    Can some one please tell me if I take a trade on say EUR/USD on the monthly time frame is that trade subject to the ups and downs that occur say in the 5minute chart.
    If so is this why I'm told I need to have a larger account/margin to weather these ups and downs so as not to be stopped out.

    Hope i've made this is clear enough to understand as a newbie to FX there is still so much that is not quite fully understood.

    Thanks
    Regards
    Allan
     
  2. Forexwatchman

    Forexwatchman Sergeant

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    Yes knightal, everything you said is true. The different time frames are all connected by the same price action. Think of the different timeframes as the zoom feature on a camera. When zoomed all the way out, you are looking at the monthly chart and to zoom all the way in you'll be looking at the 1 min. chart (or closer depending on your platform). This is where many new traders get confused when they start looking for trade setups using ever timeframe they can. What looks like an uptrend on the 5 min chart will turn into a simple retracement of a bigger downtrend on the hourly chart. What I suggest you do is stick to 2 time frames only. They should be separated by multiples of 3 or 4, so you can use the 5 min and the 15 min, or the 15 min and the hourly. The idea here is to use the lower time frame as the chart you choose your entries and exits because you can more closely watch price action and predict its movements in conjunction with the higher time frame which serves as your guide for the overall picture of what that currency pair is doing. That's the short answer, let me know if that helps clarify things or not.
     
    #2 Forexwatchman, Jul 31, 2010
    Last edited: Aug 1, 2010
  3. knightal

    knightal Private, 1st Class

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    Thanks Forexwatchman your explanation makes things a lot clearer

    regards
    Allan
     
  4. osasyankee

    osasyankee Private, 1st Class

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    As a beginner, i advice that u concentrate more on the 1min time frame. Trade daily and learn more at this stage to avoid losing all your initial deposit.
    Hope this help.
     
  5. TimeTrade

    TimeTrade Recruit

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    I don't know, if it's best for beginners to concentrate on the 1min time frame...
    The signals come very fast and many failures arise there i think.
    Maybe one should try to define the trend on a 15min or hourly chart and then place entries and exits on the 5 min chart or so: like forexwatchman said...
    On this timeframes one can get a better overview and a good felling for the price-moves...
    but that is my opinion

    have a nice day
     
  6. knightal

    knightal Private, 1st Class

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    thanks

    Hi
    Thanks everyone for your comments. Yes I do find the 1 min time frame a bit quick for me. But it would be excellent if you could see 5 mins into the future LOL. We wish!!!!

    Regards
    Allan;)
     

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