Hey man, thanks
Yes its the never ending debate between Larger and Smaller Time Frames. Yes, Swing trading - 4Hour and Daily, Day Trading, lower time frames- 1h and lower. Why did you make such a big switch from Daily to 5 Minute?
I will never say that it is [B]impossible [/B]to be profitable Day Trading. But if [B]95% of people[/B] are said to fail and the [B]majority of traders[/B] do so by Day Trading on the smaller time frames, isnt that saying something?
The reality of Forex Trading is that we are all trying to establish a pattern on the price movement of a very important financial asset. However, given that the price of this asset is influenced by so many factors on a Daily basis in such a short-time - trade, investments, Central Bank activity etc.- isnt it going to be more difficult to establish a pattern at such a micro level than with the larger, clearer trends?
Economists already have difficulties in Regression Analysis to establish these patterns using more reliable price data on a monthly, quarterly and yearly basis, so for us to try to do so with even more random, erratic movements each day is a very ambitious task.
There are just too many factors that affect the markets and traders each day to make this a viable choice.
Stop Losses - if these are normally 20-40 Pips for the typical day trader, and the market tends to move by only 60-80 Pips on average, the margin for error is very small especially when you add arbitrary spikes and whiplashes that are much more likely to take out Small Stop Losses than those on the Higher Time frames.
Emotions - this is the biggest factor- trying to constantly force yourself to make money each day given
- the myriad of factors to consider
- the pressure to meet a daily or weekly goal
- the unavoidable reaction of humans to losing money
just makes it an unnecessary uphill battle.
Most will continue to trade this way however, since it is the most promoted way. But the [B]possibility[/B] of profitability is one thing, [B]the reality[/B] is another.
