First of all I want to commend all involved in the conception of this excellent mesh of html, java, perl, or what have you. Great website guys!! If it weren't for you guys I'd never have figured out the difference between a pip and the extra screen inside my 42". Uhh yeah, but anyway in a use before you loose sort of way I'm going through the School of Pipsology and actively game trading through Oanda as I learn more stuff. I've made quite a few trades, basically from gut feelings and the more simple indicators, but at this point I have just been toying around with the charts and learning how to read patterns. I still have over $99,000 of the $100,000 I started with too!! One of the things that fascinates me is how you can look at a chart for the same currency pair but with different time intervals and have an entirely different trading experience. I would assume that different trading platforms may have slightly different time interval selections but Oanda charts go as low as 5seconds and as high as 1day. What I want to know is what would be the purpose of trading on a 5second graph beyond just plain gambling? Are there any sane methods of succesfully trading on this type of graph? I have heard of Payroll Trading and from what I gather you would need to use a very fast chart, correct?
the 5sec chart would be used for what people refer as scalping.
saying it's gambling is not completly accurate, because some really DO make money this way, however it's considered a very dangerous way of trading the market.
scalping means you just wait for a big report which has a massive impact on the currency you're aiming for, and as that report comes out, you just take a side and ride its trend.
as I said, it's considered extremely dangerous, because most scalpers use many lots in order to increase their profits (let us remember that we're aiming for an unknown amount of pips, meaning you can take profit after earning even as low as 1-2 pips...)
this, of course, could go against you as well. if you misread the market's behaviour, you'll end up losing many pips in many lots and this "worst case scenario" (however VERY PROBABLE) makes it all too risky for most. In addition, sometimes the price "bounces" meaning you can't even rely on your stop-loss to cut the losing trade on time.
all in all, even though it's not entirly gambling, luck really does have a relativly big role on this sort of trading. I suggest thinking twice before using this timeframe for profitable manners.
don't get me wrong though, using other multiple timefremes, like M15, H1, or D1, is highly recommanded.
here's an exmple : D1 for spotting a major trend, H1 for the minor trend and M15 for finding a good entry price when according to the H1 you should open a position. more about multipule timeframes could be found here.
Personally I like trading the 10-15 min candle stick charts. They're fun to trade & you can pickup a quick 10-20 pips.I think candle stick charts start to lose meaning when you go below 10 mins.
I have noticed Indicators apply as much to the short term trading as it does to long term. Fibonacci & Elliot wave are also very usefull in the short period charts.
Having said that, I would always still have at least 2 other charts up at the same time (usually 1 hour & 4 hour) because one time frame does not always tell the full story.