Stick with Trading on Higher Timeframes
Alot of new traders come into the forex market because they are drawn to the excitement of currency trading. They typically have this image in their heads of a Daytrader glued to a multi monitor computer screen, taking dozens of trades per day. While, day trading can be fast paced and exciting, the truth of the matter, is that the real profits are made by trading the higher timeframes rather than the small timeframes such as the 1 minute or 5 minute charts that daytraders typically rely on.
If there is just one thing that any trader can do to improve their trading without much additional efforts, its switching from trading the lower timeframes to the higher ones. Day trading poses many obstacles to the retail trader, and the transactions costs association with daytrading makes it an uphill battle at best.
There seems to be widespread misconception when it comes to what works and what doesn’t in the markets. One of those huge misconceptions is the idea that the more you trade, the more money you will make. This could not be further from the truth, and in fact, in most cases you will find that the less you trade the more money you will likely make in your forex trading.
The higher timeframes such as the 240 minute, 480 minute, and daily charts provide much higher probability trade setups than do the lower timeframes, and your transaction costs which are a combination of bid/ask spreads, slippage, and commissions, will be much less as a percentage of your avg profit per trade. Most traders fail to recognize this fact, to their own detriment. Trading on the higher timeframes provides the trader with more time to pick the best setups, and at the same times does not require you to be glued to your computer screen all day long.