Trading the ‘Daily’ Charts

Filed under: Learn Forex Trading |

Screen shot 2013-05-14 at 11.11.39Although I have talked about this before, there are a number of very notable benefits to trading the daily timeframe charts in the forex markets, and I would like to go over some of these benefits in a little more detail today and reiterate a little on what I have mentioned in past articles.

 

To begin with, the daily charts provide more reliable technical signals than any other timeframe. This means that your trade setups will have a higher probability of success. It is also significant that the spread (the difference between the buy price and the sell price) will also have less of an effect, as your stop losses will tend to be larger. For example, on a 15-minute chart, your stop loss might only be 10 pips with a spread of 3 pips. If you are risking $100 on the trade, then you are $30 down as soon as you enter the trade. However, on a daily chart, as the candles are larger, your stop losses also tend to be larger. So, a typical stop loss might be 100 pips, with the same 3 pips spread. This time, with a $100 risk, you will only be down by $3 when you enter a trade – which is much more manageable.

 

Trading the daily charts can also be very convenient for people who are in full time employment. The New York close candles tend to close at 10pm in the UK, and this is the perfect time to check the daily charts and make any trades. This will only take 10-15 minutes per day, five days per week. And finally, trading the daily charts gives traders more time for reflection, and stop you from making impulsive trading decisions (which can happen on the lower timeframe charts). So why not move over to trading the daily charts, and see how your profit/loss figures progress? Who knows, it may be the only variable missing from your trading success.

One Response to Trading the ‘Daily’ Charts

  1. I am new to any kind of trading,currently 15 minute, after reading the above on trading daily charts I will give a try, not without studying it first.

    Regards Denis Tarrant

    Denis Tarrant
    May 23, 2013 at 7:55 pm
    Reply

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