Minute chart vs daily chart

Hey good evening, is better to trade on on lower time frames since you’ll have more opportunity to place trades ? As for a daily chart you have to wait days just to place a trade and get profit.

Do yourself a big favour and stay away from the lower timeframes, it’s a ticket to the poor house with your current experience level.

Trade on demo first and become profitable.

Then trade on daily and become profitable.

It’s a total falasy that the more trades you’ll take the more you’ll earn, quite the opposite actually.

If you want to do something wise, do what most newbies don’t, do NOT trade lower timeframes!!!

4 Likes

That is, of course, unless you know what you are doing. And whilst most new traders lack experience and have a serious lack of capital trading small amounts on a small timeframe allows them to experience acutual trading with real money. This is invaluable in learning how to deal with losing money. Also their accounts cannot handle the large losses incurred when trading on a daily chart.

Really it’s horses for courses and just because maybe you cannot make money on a lower timeframe doesn’t necessarily mean that other traders cannot as well. I learnt on a 15 min chart and still trade on a 15 min chart as well as a 5 min chart hourly chart and a daily chart.

The ability to trade multiple timeframes allows for more opportunities.

Blackduck

When trading look at the higher timeframes to gauge the trade direction etc and use the lower fine tune the entry that you have already decided on. If only looking at a 1 minute chart it is very hard to trade and the chances are you will over trade and ultimately lose

@Blackduck

agreed but let’s face it, most newbies can’t do that

i think most traders (beginners or experienced) can’t handle losses when they happen to quickly, if you can good for you, but day trading is the formula one of racing driving.

Not the best place for beginners

The two biggest reasons why new traders lose before they can become good traders -

  • they trade shorter and shorter time-frames as they lose more and more money
  • they chase reversals - buying when price is falling and selling when price is rising
1 Like

Yes you are right but having said that price action doesn’t move as quick on a 15 min chart compared to say a one minute or 5 minute chart. However your loss on those charts will be a lot smaller than on a daily chart and that is where the advantage is trading on a smaller timeframe.

You have to get use to trading and losing an amount that you are comfortable with until you establish your loss threshold. If you lose 25 pips on a 15 minute chart it is a much easier loss to handle compared to say a 250 pip loss on a daily chart. Even if you are trading a micro account with a pip value of 10 cents a pip it means that the 25 pip loss is $2.50 compared to $25 on a daily chart. If you have say a $500 account which most newbies would have roughly that amount, $25 equates to about 4% of your capital. A series of $2.50 losses will keep a newbie in the game a lot longer than a series of $25 losses and hence the ability to learn to trade, learn to manage a trade and learn that losing is a fact of life in trading.

Realistically everything that happens on a daily chart happens on an hourly chart a 15 minute chart a 5 minute chart. The only difference is the speed with which it happens and the length of the trends. All charts look and react the same irrespective of the time factor. Where a bull trend on daily chart may last weeks and yield 300 to 400 pips a bull trend on a 15 minute chart that may last several hours and yield 40 to 50 pips. It’s all relevant.

However there has to be a balance between good education, demo trading and live trading if a newbie wants to learn and succeed.

Just my two cents worth.

Cheers

Blackduck

@Blackduck

I get your point not sure I agree though.

Let’s say as an end of trader I’m risking 2%.

How much am I going to risk on 15 min chart?

It sure isn’t going to be the equivalent reduction in risk per trade is it?

At smallest 0.5% more likely 1% but if revenge trading takes over after the quickest of losses (usually an unconcious reaction) who knows how much you can risk

It’s not that I don’t think you can make money day trading, you clearly can but I stand by what I say, if as a beginner this is how you start you are making things much harder than they need to be

Is this suppose to be end of DAY trader???

Because you are trading on a smaller timeframe you stop loss and therefore your risk both dollar and percentage are going to much smaller.

I don’t think that is so hard to work out.

A realistic stop loss on a daily chart maybe 100 200 pips. Depending on you account size that could be as much as 5% or more of your total capital. That would be too much risk in my honest opinion. On a 15 min chart that kind of stop loss would be ludicrous. A stop loss on a 15 min chart, could be 10 20 pips and with the same account balance, could be only 0.05% of total capital. Again its all relevant. Everything including risk reward and percentage of capital risked is all relevant.

How much day traing have you done??

Blackduck

Sorry yes end of day.

Sure your risk in pips but be much smaller but risk on total capital can still be the same if you place enough contracts, and what I meant is day traders are still going to risk about 1% of capital, where trading of daily you might only risk 2%, or slightly more

Correct but I meant all things being equal. IE 1 contract for 1 contract.

Blackduck

Go through the Baby Pips education center, and you will have your answer.