I'm more of a long term trader and I was just playing around on a demo account with a 5 minute chart and seemed to do pretty well. I know it can't be this easy. What are the downsides and advantages of trading such a short time frame?
Bobia, I think the difference lies in the experience of trading long term and trading short term. There is a difference between the experience that you get from each one, even if the program you're having is just the same. Try to play around for a longer time and perhaps you'll feel the difference.
I like to trade the 5 min when my ADHD kicks in and I need to be entertained and occupied. If I'm going to trade the 5M I start by looking at the H1 to get a feel for the general direction we're headed in that day and then move down the charts untill I'm ready to go with the 5M.
Now I do a few things that many poo poo on these boards, but it works out swimmingly for me. I never place a stop loss as I'm watching the market myself so I dont need a babysitter and I've entered the market somewhere in the middle of the high and low range for the past 30 minutes to hour. If my trade starts to go south on me I simply ride it our and wait for the trend reversal and place another trade at the reversal. Some call this averaging but really I;m just catching the trend up at a better position then my first trade which is still open. I've never had to close a trade on a loss this way. And all my trades are for 30 pips in the 5min chart.
I saw someone saying they use a 20 EMA for 5 minute charts. Is there anyone here who uses 2 EMA lines and wait for crossovers + signals from 15, 30 mins or 1 hour charts for trend confirmations? If there is someone who does that, could you please share how you trade and how profitable it is? Thank you
I now trade on the M5 exclusively. I use price action only. Don't care about fundamentals, don't care about news, and don't care about the higher timeframe trends. I look to be in and out with 30 minutes and only target 20-24 pips.