1st off I’d like to introduce myself! I have completed the excellent school here and have been actively doing a bit of getting used to the fx Market here and there when I get time.
My dilemma is (I believe the school here called it “multiple time frame syndrome”!) which time frame to trade?! As I’m a student I cannot trade until around 5pm GMT in the evening. I first started with intraweek trading (using 1hr & 4hr) however found it a little slow for my liking. I know this rules out position trading instantly! Recently though I have been trying my hand at scalping using a simple bollinger bounce strategy on the 5min chart. But I’m finding that I am only getting a couple of signals a day and due to not being in front of the computer I am missing them!
Can anyone offer some advice, maybe some others are in a similar situation with day jobs etc.?
Thanks!
You can set a “Pending” order with a stop and limit. This will make it to when the market reaches the same price as the “pending” order, the broker will enter the trade for you and your trade will have stops/limits. Most brokers offer some sort of variation of this method to allow future orders.
Given the time frame that you trade, you aren’t going to see much action except when you are asleep or at school. Volatility will be very low for scalping, so I think you’d be better off swing trading. I’m not a big fan of swing trading personally. There are plenty of ways to sneak trading time into school time though
Also, be sure to get to where you can backtest your scalping strategies. The bollinger bands aren’t very effective (at all) unless you really, really know how to use them and in which market and in each time interval, as well as each deviation and period of the Bollinger bands.
Thanks TradePlayer for the quick responses. I am not a huge fan of the pending orders, when I’ve used them in the past sometimes market sentiment etc has changed and the pending order is no longer valid and I get stopped out. Though as you say, I’m sure I can sneak some trading time in here and there!
Interesting what you say about the bollinger bands. As my strategy requires a slight amount of discretion (e.g. looking at the overall trend once I have buy/sell signals and then determining whether I really should enter the trade) it has proven difficult to backtest. However, I am now trading on a demo account with the strategy and will then be able to tweak or determine whether this is a worthy strategy!
How many pairs are you monitoring? I monitor 20 pairs using alerts set at previous days high lows, previous weeks high lows, pivots, upper and lower BB’s, etc. When the market is dead, nothing happens, but I don’t want to be trading then anyway. When the market is moving, my computer sounds like a pinball machine with more alerts triggered than I can possibly trade. Alerts are highly effective and I strongly encourage you to use them to be made more aware of all the trade possibilities happening all around you.
The other question about the best timeframe for your personal situation is one only you can answer. Many people believe that powerful computers trade below the 15M timeframe, so you have odds stacked against you on shorter time frames. Many successful traders only trade the daily charts, where you can look at charts only once in the morning before work or school, and once in the evening. The rest of their time is filled with study and chart analysis, so they never get bored. I fall into that category and this weekend I have about 30 videos I want to watch on trading, a dozen threads I want to read, the last 300 pages of a 400 page trading book, and I still have to do my chart analysis for the weekend. No boredom here
You could start your day a little early and wake up to trade the London open session where you could scalp and look for swing trades to enter before heading off to work.
Currently 3: GBPUSD is my primary with EU & GJ being the other 2. Sounds like great fun with all the alerts going off! I have briefly experimented with them in the past however haven’t used them in a while, thanks for bringing my attention to them again.
I could do. Is it advisable for a newbie like me to engage in mainly scalping BUT with the occasional swing trade on the side if I see a good set up? My only concern is not having a decent system in place for the swing trades with all my focus on the scalps.
as newbie, you should only be trading a demo account until you find your groove anyhow. I don’t know how long you have been studying FX, but I have been doing this for about a year and I have just re-funded a micro account. still not really ready to trade it as I am only breaking even in demo. Take your time and demo an account until you have a trading plan that has proven it works for you. Or your money will join the money that I had in my micro account originally, in someone else account!
Well, if you monitor more pairs, you will get more trades. It’s more effort, but you won’t get bored! Actually, for me, scalping is MUCH more difficult to make consistent profits than swing trading, but you do get lots of trades and experience scalping, whereas in swing trading, even monitoring 20 pairs, I only get about 5 to 10 trades a week. Of course, there is always the possibility you are a natural at scalping (which I am not), and you’d never know if you didn’t try it. If you are interested in both scalping and swing trading, I’d suggest you open two demo accounts, one just devoted to swing and one for scalping. Compare them after a few months of trading and see which goes best for you. There shouldn’t be any harm in trying different time frames in different demos. I’ve had as many as 5 running at the same time to test different systems in different time frames. LOL, keeps me from getting bored!
Scalping and swing trading are so different in style that the decision will also probably be influenced by your own preference as you gain more experience. Personally, I don’t scalp as I find it unreliable and I take more losses than I am happy with. However, I have a friend who basically exclusively scalps and thinks that I am crazy for trading anything on the Daily chart. The thing is, we are both consistently happy with our returns. So both styles work, you just have to go with the one that suits you. With your availability, I would follow some of the advice you have alread received on here: if you choose to swing trade, you can look in on the Daily chart both in the morning before study and in the evening once you are done with your studying for the day. If you become a scalper, I would set the alarm a little earlier and look at the London open before you start study for the day. The scalper I know trades about 0600-0900 GMT and is then done for the day.
What I would not do is try to squeeze in the odd trade between lectures etc during your study day. We are all different, but for me this is a career. That takes proper concentration and a methodical approach. For me, looking in on the market in the gaps in something else is not a way to make consistent, mechanical money. We’re all different, but thought I would throw in my thoughts for what it is worth.
(Sorry to be a little late to this one, I have not been able to get on the site for a few days)
Thanks for the replies guys. I’m going to take the advice and practice both scalping and swing on practice accounts. I think that due to my time contrainsts swing trading will probably suit me better as I would be able to have a thorough review of the charts each day and at the weekend.
For my swing trading I will be mainly concentrating on S&R levels and fibs. I’m not a huge fan of indicators on the longer timeframes.
Just an additional point. Don’t make the mistake that many do and think just because you lose a few trades swing trading that it must be the wrong time frame. It’s not unusual to need a few years experience trading to be profitable in any timeframe. Constantly switching timeframes and systems might just make that take longer. Buying on lower fibs and selling on higher fibs is a proven method. There are many, like buying oversold and selling overbought. All the successful methods do the same thing. They consistently direct you to buy low and sell high. If you learn one that consistently does that, basically becoming an expert in it, you should do well in time. Of course, that’s just my own humble opinion.
Set your Support and resistance lines on bigger timeframes like 4 HR or Daily and scalp for 20 to 50 pips in a 5 minu chart…What i really mean is CONTEXT is what matters
Personally I would not study two (vastly) different methods at the same time: swing + scalping. This will mess with your brain and you will not be able to master both.
I am a n00b too and what I did was focus very hard on swing trading for a long time, because I thought it was best to work around my fulltime slave job. I did make some bucks here and there but I wasn’t satisfied with the degree of consistency. Plus swing-trading kept me constantly worrying about open trades, basically 24 hours a day.
Recently I tried scalping for the first time ever and I have to say it feels a lot more natural to me. My absolute favorite part about this style of trading is that I can put it in a concrete box and outside of that box, I don’t have any worries at all because there are never open trades outside my trading window. So the unexpected surprise to me was that scalping seems to be a prime fit for someone who is trying to do as you are, fitting it in around a slave-job or other obligations. Things are not always what they seem.
My recommendation is to try one style only for several months, see if you can make any traction. If it doesn’t appeal to you, try another one. Van Tharpe says that trading is a performance sport and that there is a perfect-fit style for everyone – we just need to find it.
I would echo that entirely. I am a swing trader predominantly, I do not scalp the Forex market, but I am full time at this. It is easy to say that end of day trading works best around a full-time job, for obvious reasons, but the trouble is that when no perfect opportunies present themselves, it is tempting to trade a less-than-perfect setup simply to be in a trade. I scan for opportunities during the normal working day as well as end of day, and thus am able to take the opportunities that are a better fit for my strategy. Limiting it to purely end of day would still see me profitable, and would be worthwhile, but would reduce my profit. The answer, as ever, is that there is a style to suit all, but in my opinion dusktrader is absolutely right to point out that either approach can work around a day job. It is far more important to settle upon a trading style that works for the individual than it is to settle upon a trading style that works around a job. Find your own style and you can make it work around most other commitments, which is surely one of the great advantages of Forex.
