I've been messing around with this short timeframe lately to try to collect the pips that make up longer timeframe candle highs and lows. I know this is traditionally considered 'noise', but I want to figure out a way to ride the wave's inside the 1H an 30min candles..even the 5 mins. I have been mainly watching the RSI indicator for overbought/oversold levels and it works if you're patient and recognize the pattern & dont jump in too early or too late. With this method I ussually have trades on the extreme top or bottom of the wick on the 1H candles.
Its very basic, and works to some extent, however I'm wondering if anyone else finds this time frame appealing and what type of setup complements this type of trading.
Please dont post and lecture on why this wont work etc...helpful contributions only please.
Trading the short term timeframes is incredibly difficult if for no other reason you have to make split second decisions. If you have the experience, knowledge, trading edge, appropriate trading mindset (psychology) and can remain in your trading zone throughout then it is certainly possible to make money.
Your best bet for background reading and research should be to focus on articles and books from successful pit traders.
One of the more intriguing scalping approach on very short time frames is called rainbow trading. Information on it can easily be found on the Oanda and Forex Factory forums, although most discussion now takes place on the Cyrox forums. Rainbow traders often trade from the 1 second chart!
I demo traded the approach for over a month and came to the conclusion that it didn't fit my lifestyle or personality, although it was a very educational experience which I wrote about on my blog in September.
Like any form of trading it takes hard work, patience, perseverance and knowing yourself.
I can bag pips on EU pretty consistently doing that, you need to have a good mindset and be patient tho. Also need to watch manip and have nerves or steel.
I like the 5min chart tho because it does help to get the bad price action out of the picture, there is alot of bad price action on 1sec and it takes awhile to learn good vs. bad PA and if/when the pair is tradeable