Podcast:

Should you trade the short time frame charts?

In this weekly video:

00:22 – Always getting asked this question – I cannot trade the main sessions

01:20 - Go to the longer time frame charts

01:54 – Getting affected by fundamentals and spread size

02:38 – How much time to you want to spend at the charts each day?

03:23 – Trade less and make more

03:52 – Trade analysis and a 55% gain per year

Should you look at trading short time frame charts? Let's talk about that and more right now.

Always getting asked this question – I cannot trade the main sessions

Hi Forex Traders. This is Andrew Mitchem here, The Forex Trading Coach. Video and podcast number 237.

Now, I get questions every week, and probably every day and people say to me, "Look Andrew. I can't trade the US session. I can't trade the European session. I'm at work. I've got family commitments. I'm asleep then," all these kind of issues that people have and for some reason, people seem to think that they have to trade the European session, which of course if you live in America, that's no good because it's like two or 3:00 in the morning.

People think they need to trade the US session. Well, for me here in New Zealand, that's two or 3:00 in the morning. I had a guy just yesterday from New Zealand. He said to me, "I can't trade the European session because that's our night time." He said, "I work nights so I can't trade in that European session, which I know is the most active time and it's the most profitable time to be a Forex trader. How do I get around it because I can only look in the daytime, which is the Asian session, and nothing happens most days in the Asian sessions so I can't trade. How do I work this, Andrew?”

Go to the longer time frame charts

Well, the simple answer is, go to the longer time frame charts. Go to the daily charts. You could trade five and 15 minute charts if you wanted to. My system works very nicely on those time frame charts. In all honesty, I don't trade them. It's just something that just doesn't suit my personality. I don't like sitting, watching the charts, watching the screen all the time, feeling like you have to be taking trades all the time. The shorter the timeframe you go, generally the less reliable the trading information, the technical information is.

Getting affected by fundamentals and spread size

You are more likely to get influenced by news events like fundamental events and widening spreads. Spreads actually become such a big part of your actual performance, because if you're trading and taking like a handful of pips maybe at like 10, 20 pips of profit, depending on the trade. You've paid two or three pips to get into that trade, all of a sudden, 10, 15% of your profit is being eaten up by the spread.

If you trade longer timeframe charts such as like daily charts and your profit target may be in 80 pips, 100, 150 whatever it might be depending on the trade again, and the volatility in the market at the time. I can handle paying two or three pips because it doesn't really make a great deal of difference.

How much time to you want to spend at the charts each day?

The other thing is also, how much time do you really want to spend at your charts? By trading the daily charts, it doesn't matter where you live in the world. I've got clients in 59 countries all around the world, all with different jobs, different set of commitments that they have in their life, and not a single person has a difficulty replacing my daily trades. Why? Well, I place retracement orders and then also I personally place part of my position at the market. I look at the 5pm close of New York day candle, and make my analysis from there. A daily chart has a lot of valuable information in it.