This thread is my way of learning how to trade the 5 / 15min (mainly 5min) timeframe using the principles with which I trade the longer (1H,4H,daily, weekly) timeframes.
This is a journal to detail my current thoughts and ongoing thoughts, discoveries, experiences as I learn, analyse and demo more and more on this timeframe.
How Do I Currently Trade The Longer Timeframes:
The folling other threads have an influence on how I trade the higher timeframes:
1. James 16 Chart Thread
2. Jacko's Forex House of Pleasure and Pain
3. Trend Trading Chart Thread
4. Trading With Deadly Accuracy Method
5. Peaks and Valleys (Trading Naked)
My trading methodology:
I mark major support / resistance zones (Price Pivot Zones - PPZ) on the higher time frame (starting with the weekly) working down to the 1HR and then watch how price reacts at these areas i.e. price action (limited to pinbas, outside bars, inside bars - not so keen on these, double / triple bar highs, lows, double bar high lower close - DBHLC and double bar low higher close - DBLHC).
The more supporting confluences at the PPZ areas the better - i.e. divergence, big round numbers (BRN), fib retracements (I only use 50 and 61.8).
I sometimes also take trades merely on the PPZ without waiting for price action, if there is a lot of conluence and it is a strong PPZ area together with decent fib retracement then I will take a trade - this is particualry true with pairs that are in a strong trend.
I also bear in mind charts of crude oil, gold and the dow in trading currencies as there is obvious correlation and they can give you a heads up on what might be happening in the near future.
My main last method of trading is merely to trade the trend. I have focused mainly on EU and GU this year on the longer time frames and have multiple posiitions running where I just add more positions on retracements to PPZ areas.
Why 5 / 15 min trading?
I'm at the stage in my trading career whereby I have what I would qualify as a small account and am in 'account building' mode. I successfully trade the longer time frames (although I'm still learning and by no means an 'expert) and want to add another type of trading where I can use the skills I've gained to build my account more quickly. The lower time frames obviously fit the bill as I have the time to do this in between trading the longer time frames.
The following threads have led me to where I am today on this time frame (in addition to the ones listed above):
1. Jankone 5 min Thread
2. Phillip Nel - 5 min intraday system
Differences between the 5min and longer time frames:
As far as I'm concerned there a are minimal difference, but the main ones I have seen / can think of are as follows:
1. PPZ strength - I'm a believer in the fact that the higher the time frame the stronger the PPZ area thus a weekly PPZ area should hold true on all time frames below it, thus a 5 min PPZ does not hold much strength on higher time frames and can be less reliable and more easiliy 'swept' aside.
2. Speed - pretty obvous but the speed with which price moves and speed with which you need to analyse and make a decision on a setup.
The Future
What I'm looking to do is to apply the main principles of my longer time frame trading on the lower time frames, with the main focus on keeping it simple at the start and then 'experimenting' with bringing in other factors.
I'm also concentrating purely on EU at the moment as I feel with this time frame that you can get a feel for how price moves, it's volatility and daily price movements. It might sound a bit wishy washy and it is hard to explain but I am a believer that the more you can get to you know your markets the better - this works on the higher time frame too - I trade more successfully on the majors - i.e. the pairs I know well than the exoctics. Whether it is subconsciouisly or not I do believe you can get a feel for a market over time.
My main initial focus is to base my demo trading on price action (J16 style) and breakouts in a trend (and virtually everyday you have a trend on this lower time frame - a big advantage) i.e. once a trend is formed finding an entry and then additional entry points to continue adding positions into a trend until the trend has changed. This is how I have traded the EU very successfully on the daily / 4HR time frame this year (obviously it is in a strong trend) and using price actions as a means to add in positions or warn of a potential reversal or change in trend. Thus I wont be using fibs, divergence, round nunbers, floor trade pivots, higher frame PPZ areas, MA's for the time being just keeping it as simple and pure as possible and then testing and adding in the other trading tools I use on the higer time frame one by one to see if they can add something.
Like my higher time frame trading I am looking for a high win rate. I average 80-90% on price action @ PPZ areas and 60-70% on pure PPZ trading on the higher time frame trading. I like to have the confidence that I can analyse the market correctly more often than not - I know some methods / systems have a low win rate but very high %R, but this is not for me. I am not 'wired' so that I can suffer a load of losses knowing that I will get one win which will make huge return, I know myself and know that I cannot have enough confidence in a method like this, I need to be correct most of the time, I am an analytical person and confidence comes with the fact that I know that say 70% of the time I be correct in my market analysis.But,. I do not see why this cannot be achieved with the same tools I use on the higher time frame trading.
Right, I think that is everything I have wanted to say for the time being. As I have stated I will be focussing on EU and mainly 5 mins and I have been demo trading since the start of this week i.e. 22nd March 2010 and saving my charts with market analysis and trade details as I go along. I will start to upload these over the next few days and well, just continue my journey on demoing, analysing and learning.
I welcome anyone else who trades this time frame using the main principles set out above to post, share thoughts and comments, after all that is is the wonder that is the great community of forex factory, the majority of people are here to learn and the best way to learn is to help and share ideas and epxeriences with one another.
Mark
This is a journal to detail my current thoughts and ongoing thoughts, discoveries, experiences as I learn, analyse and demo more and more on this timeframe.
How Do I Currently Trade The Longer Timeframes:
The folling other threads have an influence on how I trade the higher timeframes:
1. James 16 Chart Thread
2. Jacko's Forex House of Pleasure and Pain
3. Trend Trading Chart Thread
4. Trading With Deadly Accuracy Method
5. Peaks and Valleys (Trading Naked)
My trading methodology:
I mark major support / resistance zones (Price Pivot Zones - PPZ) on the higher time frame (starting with the weekly) working down to the 1HR and then watch how price reacts at these areas i.e. price action (limited to pinbas, outside bars, inside bars - not so keen on these, double / triple bar highs, lows, double bar high lower close - DBHLC and double bar low higher close - DBLHC).
The more supporting confluences at the PPZ areas the better - i.e. divergence, big round numbers (BRN), fib retracements (I only use 50 and 61.8).
I sometimes also take trades merely on the PPZ without waiting for price action, if there is a lot of conluence and it is a strong PPZ area together with decent fib retracement then I will take a trade - this is particualry true with pairs that are in a strong trend.
I also bear in mind charts of crude oil, gold and the dow in trading currencies as there is obvious correlation and they can give you a heads up on what might be happening in the near future.
My main last method of trading is merely to trade the trend. I have focused mainly on EU and GU this year on the longer time frames and have multiple posiitions running where I just add more positions on retracements to PPZ areas.
Why 5 / 15 min trading?
I'm at the stage in my trading career whereby I have what I would qualify as a small account and am in 'account building' mode. I successfully trade the longer time frames (although I'm still learning and by no means an 'expert) and want to add another type of trading where I can use the skills I've gained to build my account more quickly. The lower time frames obviously fit the bill as I have the time to do this in between trading the longer time frames.
The following threads have led me to where I am today on this time frame (in addition to the ones listed above):
1. Jankone 5 min Thread
2. Phillip Nel - 5 min intraday system
Differences between the 5min and longer time frames:
As far as I'm concerned there a are minimal difference, but the main ones I have seen / can think of are as follows:
1. PPZ strength - I'm a believer in the fact that the higher the time frame the stronger the PPZ area thus a weekly PPZ area should hold true on all time frames below it, thus a 5 min PPZ does not hold much strength on higher time frames and can be less reliable and more easiliy 'swept' aside.
2. Speed - pretty obvous but the speed with which price moves and speed with which you need to analyse and make a decision on a setup.
The Future
What I'm looking to do is to apply the main principles of my longer time frame trading on the lower time frames, with the main focus on keeping it simple at the start and then 'experimenting' with bringing in other factors.
I'm also concentrating purely on EU at the moment as I feel with this time frame that you can get a feel for how price moves, it's volatility and daily price movements. It might sound a bit wishy washy and it is hard to explain but I am a believer that the more you can get to you know your markets the better - this works on the higher time frame too - I trade more successfully on the majors - i.e. the pairs I know well than the exoctics. Whether it is subconsciouisly or not I do believe you can get a feel for a market over time.
My main initial focus is to base my demo trading on price action (J16 style) and breakouts in a trend (and virtually everyday you have a trend on this lower time frame - a big advantage) i.e. once a trend is formed finding an entry and then additional entry points to continue adding positions into a trend until the trend has changed. This is how I have traded the EU very successfully on the daily / 4HR time frame this year (obviously it is in a strong trend) and using price actions as a means to add in positions or warn of a potential reversal or change in trend. Thus I wont be using fibs, divergence, round nunbers, floor trade pivots, higher frame PPZ areas, MA's for the time being just keeping it as simple and pure as possible and then testing and adding in the other trading tools I use on the higer time frame one by one to see if they can add something.
Like my higher time frame trading I am looking for a high win rate. I average 80-90% on price action @ PPZ areas and 60-70% on pure PPZ trading on the higher time frame trading. I like to have the confidence that I can analyse the market correctly more often than not - I know some methods / systems have a low win rate but very high %R, but this is not for me. I am not 'wired' so that I can suffer a load of losses knowing that I will get one win which will make huge return, I know myself and know that I cannot have enough confidence in a method like this, I need to be correct most of the time, I am an analytical person and confidence comes with the fact that I know that say 70% of the time I be correct in my market analysis.But,. I do not see why this cannot be achieved with the same tools I use on the higher time frame trading.
Right, I think that is everything I have wanted to say for the time being. As I have stated I will be focussing on EU and mainly 5 mins and I have been demo trading since the start of this week i.e. 22nd March 2010 and saving my charts with market analysis and trade details as I go along. I will start to upload these over the next few days and well, just continue my journey on demoing, analysing and learning.
I welcome anyone else who trades this time frame using the main principles set out above to post, share thoughts and comments, after all that is is the wonder that is the great community of forex factory, the majority of people are here to learn and the best way to learn is to help and share ideas and epxeriences with one another.
Mark