I am looking for a little advice, I am working in building my own trading plan,
now condition to this, is my small account, 300 dollars.
Obviously, I cannot swing trade, so for right now, I try to scalp.
I mostly follow a very simple support and resistance strategy, max 2 trades opens
at the same time, but the part I am struggling is to decide which time frame should I work on.
I would like to keep my trade no more than a day open when I can,
which means I should accept a smaller number of pips and work on a smaller time frame.
So what time frame should I draw my support & Resistance and what is a realistic number
of pips I should aim for, keeping in mind that I prefer not to pay more than a day
worth of swap charges if possible.
I don’t think there can be a categoric right answer to your main question. However, as a guideline, right now your aim is to develop a strategy, so the time-frame has to be long enough so you actually have time to observe, assess and learn from what happens after you hit the trade button.
Obviously there is a limited number of trades you can make per day and its not a bad idea to only have one open at a time at first. But you can’t draw reliable conclusions from a very small total of trades - running 100 trades will give you more reliable instruction than just running 10. So why not run a demo account and learn from your demo trades at zero cost?
The most important thing to establish immediately is how to treat the trades which you enter and which immediately start to lose real money. When you get in a car, find out how the brakes work before you drive away…
Thanks a lot for your reply, I appreciate it.
I am, currently on a demo account, I set it to $300 because that was the amount I was planning to start when going live. I really wanted to practice with such small account because if I practice with a $10K account I probably can make different decisions given that my risk per single trade would be different.
I tried to draw S & R on a 1 minute chart, but it looks not really reliable,
Would you generally draw the zones on the same time frame that you would trade in, or on an higher time frame?
I’d look at s/r in both my own and higher time-frames though in truth I don’t really pay them much attention and I never draw them. Except that I always open trades via buy or sell orders, never live, and almost always for instance the buy order would be just above a previous high so in a sense I am treating the previous high as resistance.
But if you’re trading on any intra-day time-frame, do take account of the daily highs and lows too, these will be important.
As for the 1-minute time-frame, I regard that as just white noise. Try it by all means but I’d be amazed if you found conventional TA would be reliable as the text-books say on so fine a level as 1-minute. All TA started on daily charts: no TA came up from 1-minutes.