Hello I have started looking into trading not too long ago. I just have some general questions on getting started. First is it possible to reliably make profits using candlestick, chart patterns in combination with trend lines as support and resistance, and using higher time frame for general market conditions. Is this method reliable or do indicators have more potential. Second I do not prefer waiting for a long time with daily charts although I know it is recommended. However due to my work schedule I could only trade during Tokyo open. From my limited experience price moves very slow during this session. Is there a pair I can trade say in the 4 hours before lunch in the Tokyo session. E.g. current 6 EST unites states to 10 to 12 EST. Or should I just accept that daily would work better given my schedule. Thanks for your time and any help.
Here’s my opinion…
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I trade with candlesticks and support/resistance levels. I generally get my biases from the daily chart and enter trades on the lower time frames.
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I trade on the hourly chart during the Tokyo session and have found that while prices move slower, they do move. Faster is not always better.
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I trade mainly USD pairs with USD/CAD and AUD/USD being my two highest profitable pairs.
That said, it doesn’t matter how you trade as long as you can trade it consistently. It is more important to manage risk than it is to find the perfect strategy. Even strategies that lose more often than they win can be profitable if the risk is properly managed.
For example, let’s say I have a strategy that for every winning trade generates 2 units of profit, and for every losing trade I give back 1 unit of profit. If I win 4 out of 10 times, I come out ahead (8 units - 6 units = 2 units profit).
I recommend you do a lot of reading on various trading techniques and try them out in a demo account. Find what feels comfortable for you. For example, if you are trading the double top pattern but get really nervous about entering a short trade when that pattern completes, it’s probably not a good idea for you to trade that pattern. For every trader out there, there exist three or more different trading strategies. You need to find one that you can execute consistently and profitability.
From there, you just manage your risk and wait for the profits to come. No one has the holy grail of trading strategies and the actual strategy doesn’t really matter. Just so long as you can follow it consistently and it has a positive expectancy (ie, it makes money) then the law of averages will work out in the long run.
If you expect to put in $100 and turn that into $1 million then you are better off going to a casino. 90% of traders lose 90% of their money in the first 90 days. You need to figure out how not to end up in that statistic. That is what makes trading hard in my opinion.
Ok thanks I will test on a demo account.
Yes, very much so - good way to trade.
And using higher time frames for “directional bias”? Again, yes.
It’s recommended by some.
It loses a great deal in trading frequency, while gaining a little in reliability.
Not my choice.
There are loads of major pairs you can trade during those hours.
6.00 - 10.00/12.00 EST is 11.00 - 3.00/5.00 in London, 12.00 - 4.00/6.00 in Europe. No problem at all.
If I had your schedule, I wouldn’t regard it as a problem at all, and wouldn’t want to trade from daily charts.
Your available time period includes a few hours out of the very best part of the day to trade, when both Europe and the US are open for business.