5% is on the high is of the recommendations you see. But still within the reccomendations. I will also trade 5% as it fits within what I am willing to risk.
The key is to be consistant, if its 5% then always 5%, don’t do one trade, 5%, the next 2%, then the next 4%…
Since you plan to run the shorter charts, I would recommend at the start of your trading day go to the daily, draw all the support resistance lines you see on the daily, and also determine if the market on the daily is tending up or down… Then when you trade your lower time frames, only trade trades that go in the direction of the daily (less risk). Seeing the daily support/resistance lines on your 15 minute chart will also allow you to see where a trade may get stopped out, as it approaches a resistance level from the daily.
Watching charts all day long is pretty much pointless for intra day trading.
The time frames you want to watch are the U.S./London overlap and or the London open. Most of the movement is there.
In my time zone the overlap is 7-11 and the open is at 2 AM. So you can guess which one I watch and trade for short term trades.
After 11 it tapers off. It may move some more, but it will be less and less as the day wears on. 3 in the afternoon and on it’s all but dead. You might get some movement later in the asian session or at the start of the next daily candle. But, 7-11 is the most dependable for short term TA.
O ya, watch out for the news. It will spike badly, often.
You want to do short term trades when it is busy because there are more traders. When there is very little volume price might not move at all and can be manipulated by banks and brokers into doing BS spikes against short term TA.
TA is basically statistical analysis. If there are 1,000,000 traders thinking that price is going down and trading that way, it shows up in TA. If no one is trading the TA is weak because there aren’t enough traders for the statistical analysis to mean anything. This is particularly important for short term/small pip profit trading. Remember people drive price.
P.S. I recommend not risking anymore than .001 % until you find an edge. Otherwise you are just gambling badly. You don’t risk more until your edge is defined. Risk doesn’t help define the edge.
You’ve got to know win/loss, risk/reward and what the size of the average winner and loser are. That should be found over a sample size of no less that 20 trades where user error didn’t come into play and or you didn’t disobey your trade rules.
You’ve got to know win/loss, risk/reward and what the size of the average winner and loser are. That should be found over a sample size of no less that 20 trades where user error didn’t come into play and or you didn’t disobey your trade rules.
I would say more like 100 trades before you increase your risk. The reason I say this is you may come up with something that seems to work great in a particular market condition, high or low volume, trend or range, low impact news you predict. Once the market changes you could be in for a surprise:D. Keep at the testing long enough to get through a bad spell. Knowing how bad your system performs in the worst case will help you keep your head on straight with real money at risk.
Even if you are trading off a lower time frame chart keep a close eye on the longer time frame charts. This is what should give you the direction to trade, and which pairs to watch for entries on the lower time frame charts. I would watch a few pairs and try and pick A+ entries. The tendency to over trade is high if you are watching one pair and waiting for an A+ set up that only happens once or twice a day if that.
Right now I am trading on 15m chart. It doesn’t drive me “bonkers” because price is still moving a good amount, and is way more realiable than 5 min. The reliability goes up exponentially from 1min to 5min to 15min to etc…
The one thing that we all including me should understand “about my trading” is when I previously traded it was “gambling” I was not ready to have a live account even though my demo account was doing ok. One big gain does not mean it will happen ever time.
For now and probably for the next few weeks research is still needed before any trades. Then development of a system, rules to trade by, and maybe the most important money management rules.
I appreciate all of that advise and will refer back to it from time to time as I have been while watching charts, reading post, and figuring how everything works.
Ps. If someone could point me to a thread or journal explaining 15 min chart trading I’d be grateful.