David,

Firstly, I'd like to thank you very much for your website.
It's very informative and a GREAT help!
And as they say: "The best things in life are free!"

Anyways, I have a question:

On which chart is it best to plot out your entry to the market?
1 minute, 5 minute or 15 minute?

I know the difference between day trading, swing & position, but it still doesn't help me to get started.
If I check the MVA opposed tot the EVA, the RSI, the MACD, SSD & EWO, it all looks good for let's say a SELL on the 1 minute chart. I enter the market and 5 minutes later all hell breaks loose & I lose the plot. When I check the 5 minute chart, it's obvious that it was a bad move, granted.
So I've been trying to correlate the 5 minute & the 1 minute charts, but never really does it match. So far my strategy was to enter on the 1 minute and when things get going, I move over to the 5 minute and set some stops and limits.

Am I royally screwing up here, or sort-of on the right course?

Kind regards,
Euan Jonker
South Africa.

hi euan,

if you're just starting out, i would recommend looking at the daily chart. the shorter the time frame you want to trade, the more experienced, informed, and calm under pressure you need to be. at least that has been my experience.

Simon,

Thanks.
It seems I was tackling this thing from the wrong side then...

Cheers,
Euan.

Hello Euan, thought I would give my opinion on chart selection... I think you have to figure out what kind of trader you intend to become...If you have time to sit in front of the computer all day and stare at the charts...then I could certainly understand you watching smaller time frame charts....In my own case, I dont have that kind of time to do that...but I am usually near a computer...so I try to review the charts every 4 hours...normally check the daily for overall trend...trade off 4 hr charts,.....and use 1 hour/30 min charts for timing of the entry....hope that helps....Jerry (miami USA)

Hi Euan,

Thanks for the compliment I am glad you like the site and are finding it useful.

Also thanks to Simon and Jerry for their responses on this which I am generally in agreement with.

To add to what they have said here, there is a video below on multi time frame analysis, which goes into how to look for setups using different time periods, once you have decided what type of trader fits your personality and Schedule the best.

Day Trading Lesson 6: Multi Time Frame Analysis

Hope that helps. If there are any other questions or comments on this one please feel free to post as always.

Best Regards,
Dave

__________________
Disclaimer: Trading is risky and can result in substantial financial loss. As always my posts are simply one traders opinion and should not be taken as trading advice. I am not a financial adviser so everyone please do their own analysis and take responsibility for their own trades.

Jerry,

Thanks for your comments.

I am a software developer, so I'm behind a computer pretty much most of my day. I've never traded before as 100% of my investments so far have been in real estate. South Africa's going through a higher interest rate cycle and I'm feeling the pinch right now. In fact, I'm sick of it. So now I'm looking for something else. (Real estate also pretty much ties one down to a certain location)

Anyways, coming back to matters present, I get what your'e saying and have come to the following conclusion:

I'm not going to give up my day job for this (yet ), I first need to make some successful trades on my demo account before I put some real cash up. I'm able to scan the markets every so-often, so I guess "Swing Trading" would describe my ideal scenario.

I use FXCM's micro-lot trading station. It's really nice. (From a software developer's point of view. I have no other opinion, as I haven't tried any other application yet.) It gives me tick, 1 minute, 5 minute, 15 minute, 30 minute, 60 minute charts and then it skips to 1 day, 1 week and then 1 month.

To follow your advice makes a lot of sense to me, but I find skipping from 1 hour to 1 day a bit much and I reckon that's where my answer lies. I need something that gives me a view between 1 hour and 1 day. Say 4 hours or 8 hours.

What tool do you use to get the 4 hour charts you mentioned?
How do you rate FXCM's Trading Station II?

Regards,
Euan.

Hello Euan,
different charting services offer different products...I personally use e-signal...(Hayward California USA) (esignal.com) for that very reason... I can actually simply type in the amount of minutes I want a chart for... example, I have the standard monthly, weekly, daily etc....but I also have 12 hours, 8 hours, 6 hours, 4 hours, 2 hours.....I dont always "use" all of these time frames, but sometimes it helps to identify a pattern that may not be recognizable on another time frame...hope it helps you....good luck...Jerry

David,

Thanks for your response.

I've followed your entire 'Basics of Trading' course and am busy with the 'Forex Trading' one. They're great!

One question:

Simon reckons I should start on trading the day-charts, as a beginner. I understand why and so, last night, I've had a look at just that. I can see 'Double Tops/Bottoms' and 'Flags' and something I read somewhere else (1-2-3 patterns, which is nothing other than a DT or a DB anyways...).

But when following your advice on where to place entry points and stops, I find that my risk-reward ratio goes out the window when trading the day-chart instead of say, the 5 minute chart.

On a day-chart, the difference between entry and stop-loss is just too great for the 2%-risk rule.

It seems I'm at a cross-road now. 'Extreme volatility, quick trades & tight stops' vs. 'The bigger picture, longer time-frame, but very big stop-values'

Am I not seeing something obvious, or is this a known issue?

Thanks again for all your help & effort,
Euan.

Jerry,

I checked out the eSignal website and they want my Credit Card details for the "30-day Free trial" (which sort-of defeats the object).
But being eager to learn, I'm still game for it.
The issue is, they have so many different options to pick from.
If I'm going to have to pay for it (and I'm sure they'll refund me when I opt out before the end of the 30-day trial), I just want to make sure I buy the right thing.

I'm looking to trade Forex.
Which would you reccomend?:

http://www.esignal.com/products/specials.aspx

a) 30-Day, Money-Back Guarantee on eSignal, Advanced GET Edition
b) 30-Day, Risk-FREE Trial of eSignal°
c) 30-Day, Risk-FREE Trial of FutureSource Workstation°
d) Limited-Time, 30-Day, Risk-FREE Trial of LiveCharts
e) Introducing eSignal QLink (DDE): Try this fast and easy data integration tool FREE for 30 days!
f) eSignal Market Scanner Trial (for eSignal subscribers only!)
or
g) Get the ALL-NEW eSignal News and Research Package FREE for 30 days

I'm guessing a or b.
What do you reckon?

Regards,
Euan.

Hello again Euan.... I remember if felt strange to imagine paying for services...in this case definaltely choose option B... If you pay the entire year in advance works out to approx $100 USD per month...the advanced GET service..is a premium service, and sells for around $4000.USD..(Ive been to their sales pitch),, but in my opinion...if you learn how to read charts...wont need advanced get.....want to point out, that although paying for charts isnt the "ideal" situation... they are a 3rd party, and have NO incentive to make the charts read "their" prices..e-signal is NOT a market maker and therefore you have to get codes from them depending on which broker you use...I personally like having my chart and broker seperate...you can try for a month for free...if you dont like them, you can always cancel...Im aware there ARE other charting systems for less money...but I especially enjoy all the tools they give you on e-signal....(just my opinion).. a good mechanic uses the best tools, a surgeon does not use the least expensive scalpal, I ll bet you dont drive the cheapest car you could find, the best Universities costs more money...I think of e-signal as better....just my opinion Euan...hope it helps....Jerry