What sort of time frame should I be using when looking at candlestick charts. I’ve been demoing for a month and change. At first I just used a 1 min chart and a 30 minute chart (FX Accucharts). I know many people here seem to use longer time frames (like 15, 30 minutes, 1 hours, 1 day). Even recently I use a full screen 3 tick chart, and then I can hit F12 in FX Accucharts to switch virtual screens to another one which shows me a 1 minute chart, 5 minute, 30, and 1 hour.
Are my time frames completely too short? Am I just trading noise? My best trades in demo have been longer term ones, mostly during the day I end up losing what I had made overnight.
I’m also suspecting (after reading forums) that I’m making far too many trades, 40 a day wouldn’t be a bad estimate.
I have a fair amount of time each day (6-10 hours a day most days if need be) to practice/trade/research/etc.
Next, If I go with something more long term (I’d LIKE to hold my trades for a few days if possible), then where do I set stops? I’m having a horrible time with trailing stops, always either stopping myself out or having my stops set too far back otherwise.
As far as money management is concerned, I’m looking at trading 1K (micro) lots, with $2,000. So, 1% is $20 or 200 pips. (in my demo trading, i’ve been frequently setting stops between 15 and 30.
Some other newbie questions:
How many timeframes should one use simultaneously before placing an order?
How often should I move my stops to take profit?
Where can I find the data used for fundamental analysis?
Also… is a 10% return per month, (e.g. $200 a month off of $2000 sustainable), or am I just off my rocker?
What sorts of returns can one expect per month if you are willing to risk 1% per trade as a loss (not that I would necessarily recommend such a crude stop selection method, but I wouldn’t know what’s better)
You’re getting way ahead of yourself. You need to start with the very basics. The most basic thing you can do is go through BabyPips school and get a grasp of how this market works. You will also pickup how to use technical and fundamental trading techniques. After completion of the school, try a basic trading system on demo like Cowabunga. Then read Tymen1’s candlestick thread or the James system. Slow down and turn your mind into a sponge. It takes time to answer all of your questions. The best answer will ultimately come from you.
I will now give you one direct answer to one of your questions. Trading a tick chart is absolutely pointless. How can you read current market sentiment on a tick chart?
Forgive me for having not pointed this out earlier, but it may help clarify my question.
I’m familiar with technical analysis already, but the books I have on it were contextually designed for securities and commodities trading more than FX trading. (although the material still applies, i need a way to apply the material to FX)
What I’m curious about is the framework for FX trading, (how many and which charts to use (some seem to use 2 and some seem to use as many as 5, where to set stops initially and how often to move them).
In other words, if you were to go through a step-by-step of how you plan a trade, excluding all the fundamental and technical analysis steps, how would you do it?
Tymen�s thread is excellent, you�ll learn a lot. I do think you are trading way too much though, at least for me I wouldn�t hold trades for days. I just don�t have the stomach for it . I have used 15 minutes and less but those are too short and too choppy. I�ve been doing really well with just the 30 and 60 minute charts. My trades last from minutes to maybe an hour or so. I look for 10-15 pips and get out.
. I have used 15 minutes and less but those are too short and too choppy. I�ve been doing really well with just the 30 and 60 minute charts. My trades last from minutes to maybe an hour or so. I look for 10-15 pips and get out.