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Profitable Trading

  • #1
  • First Post: Oct 15, 2018 11:04am Oct 15, 2018 11:04am
hi,

is it even possible to trade low timeframes successfully? Do all professional traders trade only like H4 and up?

What are are the distinctions between retail traders and institutional traders? Why can’t retail win as good as institutional? How does one create a stable trading portfolio? For example I hear if you buy USDJPY then don’t buy GBPUSD because you’ll be going against yourself, buying and selling USD together, but both always have different volatility that widely ranges so how do you calculate what lot size....

hope a pro can give a tip or two, thank you so much
Better to win one trade a week than to lose many a day.
  • #2
  • Oct 15, 2018 11:36am Oct 15, 2018 11:36am
Yes is possible but dependent on your approach. The market has drivers and inbetween those there is noise so your job is to identity the right times to be in and out of the market and define a strategy that fits. If you can nail the drivers then you are well on your way so long as you can define flexible entry and trade management process. Being rigid is one of the worst ways to approach it.

Institutional traders trade differently to retail traders. I learned from institutional traders and they apply a fundamentals first approach. They also have a global team of analysts so they can get to info in summary format quickly. As a retail trader you can pay for subscriptions for that type of service.

As to your pair question it isn't black and white. You need to pair strongest with weakest and that can include pairs that correlate but remember in 2 crosses against USD there are 2 other economies. Yen is also a safe haven currency so it will behave against its fundamentals if they are negative during risk off sentiment.

By the way you don't need charts to define trades but they are useful for managing trades. Don't get caught up too much in charts as they are just a small facet of trading.
  • #3
  • Oct 15, 2018 11:40am Oct 15, 2018 11:40am
Quoting FXtrader22
hi, is it even possible to trade low timeframes successfully? Do all professional traders trade only like H4 and up? What are are the distinctions between retail traders and institutional traders? Why can’t retail win as good as institutional? How does one create a stable trading portfolio? For example I hear if you buy USDJPY then don’t buy GBPUSD because you’ll be going against yourself, buying and selling USD together, but both always have different volatility that widely ranges so how do you calculate what lot size.... hope a pro can give a...
Quick and dirty answers:

1) I trade for a living and trade off 1 minute charts. You can trade successfully off any timeframe, they all act much the same way, just quicker or slower. It's a matter of personal preference, no one time frame is better or worse than another.

2) Professional traders trade all time frames, down to tick

3) As a broad generality, retail traders are amateurs, instititional traders are professional. What's the difference between an amateur and professional soccer player, for example?

4) Retail can win as good as institutional, the real difference lies in 3) above

5) You should always consider the correlations of different instruments when trading multiple markets at once so you understand what your overall exposure looks like

6) lot sizes in different markets can easily be adjusted for the volatility of different markets e.g. through ATR comparison, to allow roughly equal risk exposures, if this is what you want to achieve
  • #4
  • Oct 15, 2018 12:24pm Oct 15, 2018 12:24pm
Quoting FXtrader22
hi, is it even possible to trade low timeframes successfully? Do all professional traders trade only like H4 and up? What are are the distinctions between retail traders and institutional traders? Why can’t retail win as good as institutional? How does one create a stable trading portfolio? For example I hear if you buy USDJPY then don’t buy GBPUSD because you’ll be going against yourself, buying and selling USD together, but both always have different volatility that widely ranges so how do you calculate what lot size.... hope a pro can give a...
i am not a pro but my opinion is yes, you can trade profitably lower tf, the only problem is, lower tf, higher transaction cost due to spread.
As Above, So Below
  • #5
  • Oct 17, 2018 6:49pm Oct 17, 2018 6:49pm
Quoting FXtrader22
hi, is it even possible to trade low timeframes successfully? Do all professional traders trade only like H4 and up? What are are the distinctions between retail traders and institutional traders? Why can’t retail win as good as institutional? How does one create a stable trading portfolio? For example I hear if you buy USDJPY then don’t buy GBPUSD because you’ll be going against yourself, buying and selling USD together, but both always have different volatility that widely ranges so how do you calculate what lot size.... hope a pro can give a...

Basically, small time frames are noisy; on the other hand, big time frames are relatively stable (market trend)! By the way, I don’t count currency correlation as major; so it’s very common to me buy for EURUSD when I have a sell trade on GBPUSD.
  • #6
  • Oct 17, 2018 11:41pm Oct 17, 2018 11:41pm
Quite the contrary,

as a firm specialising in daytrading, we trade tiny timeframes. Entry and exits go from 5-10 mins down to seconds. I find shorter timeframes are easier to predict, market order flow is real. People who are caught and puking out are real. That's not to say longer timeframes doesn't work but personally I find that more of a gamble, simple reasoning is any unexpected news can change the entire trend / range in an instant.
  • #7
  • Oct 21, 2018 11:03am Oct 21, 2018 11:03am
Quoting EcoTrader
Yes is possible but dependent on your approach. The market has drivers and inbetween those there is noise so your job is to identity the right times to be in and out of the market and define a strategy that fits. If you can nail the drivers then you are well on your way so long as you can define flexible entry and trade management process. Being rigid is one of the worst ways to approach it. Institutional traders trade differently to retail traders. I learned from institutional traders and they apply a fundamentals first approach. They also have...
thank you for your response. hmm, that's the question... how do i identify these "drivers"? don't get caught up in charts is what you say, so how would one figure out where to enter. do you mean to say that technical analysis is pointless?
Better to win one trade a week than to lose many a day.
  • #8
  • Oct 21, 2018 11:05am Oct 21, 2018 11:05am
Quoting Oldtraderman
{quote} Quick and dirty answers: 1) I trade for a living and trade off 1 minute charts. You can trade successfully off any timeframe, they all act much the same way, just quicker or slower. It's a matter of personal preference, no one time frame is better or worse than another. 2) Professional traders trade all time frames, down to tick 3) As a broad generality, retail traders are amateurs, instititional traders are professional. What's the difference between an amateur and professional soccer player, for example? 4) Retail can win as good as institutional,...
i just heard from several pro traders that the lower timeframes are noise, is why i mentioned it. thanks for your answers, you did give me a few ideas i can try out.
Better to win one trade a week than to lose many a day.
  • #9
  • Oct 21, 2018 11:10am Oct 21, 2018 11:10am
Quoting FXtrader22
{quote} i just heard from several pro traders that the lower timeframes are noise, is why i mentioned it. thanks for your answers, you did give me a few ideas i can try out.
Agree with your statement on lower time frames; I see the trend status of higher time frames are relatively stable than the lower time frames! This is why, traders are comfortable with the higher time frames!
  • #10
  • Oct 22, 2018 12:13pm Oct 22, 2018 12:13pm
Quoting FXtrader22
{quote} i just heard from several pro traders that the lower timeframes are noise, is why i mentioned it. thanks for your answers, you did give me a few ideas i can try out.
It all depends on what you call noise. Most institutional traders are trading for bigger, longer term, fundamentally driven moves. They also take larger, less quickly moveable positions, hence your statement is correct in that context.

However, technical traders and smaller retail traders who can be nimbler can easily trade lower timeframes, and the patterns you see on say, a 1min chart, are very much the same as you see on a daily chart. Take away the axis labels and you'd have a hard time telling the difference. It's not noise then, it's just an equally tradeable opportunity on a lower TF.
  • #11
  • Oct 25, 2018 12:43am Oct 25, 2018 12:43am
Quoting Oldtraderman
{quote} It all depends on what you call noise. Most institutional traders are trading for bigger, longer term, fundamentally driven moves. They also take larger, less quickly moveable positions, hence your statement is correct in that context. However, technical traders and smaller retail traders who can be nimbler can easily trade lower timeframes, and the patterns you see on say, a 1min chart, are very much the same as you see on a daily chart. Take away the axis labels and you'd have a hard time telling the difference. It's not noise then, it's...
From all my experience in trading I can look at any chart and have a pretty good feel at what timeframe it is. They all have a distinct move to them... And M1 is by far the most crazy and hard to predict one LOL
Better to win one trade a week than to lose many a day.
  • #12
  • Oct 25, 2018 12:58am Oct 25, 2018 12:58am
Everyone has a different strategy. What's noise to one trader is bread and butter for another. There is no such thing as an area of trading that isn't profitable for at least someone out there.
  • #13
  • Oct 25, 2018 3:00am Oct 25, 2018 3:00am
Quoting FXtrader22
{quote} From all my experience in trading I can look at any chart and have a pretty good feel at what timeframe it is. They all have a distinct move to them... And M1 is by far the most crazy and hard to predict one LOL
Oh, can you tell a difference just by looking at a chart?

Do you mind if I test your ability?

Here are 4 charts of the same pair. 1 month time frame, 1 day, 1 hour and 5 minutes. Can you tell which one is which one? Be assure, those are honest screenshots from each time frame.

Attached Image (click to enlarge)
Click to Enlarge Name: pair_time_aa.PNG Size: 29 KB


Attached Image (click to enlarge)
Click to Enlarge Name: pair_time_bb.PNG Size: 32 KB


Attached Image (click to enlarge)
Click to Enlarge Name: pair_time_cc.PNG Size: 40 KB


Attached Image (click to enlarge)
Click to Enlarge Name: pair_time_dd.PNG Size: 33 KB



PS: hehehe, is not funny how many magical claims can be quickly verified?
  • #14
  • Oct 25, 2018 6:03am Oct 25, 2018 6:03am
Quoting Oldtraderman
{quote} It all depends on what you call noise. Most institutional traders are trading for bigger, longer term, fundamentally driven moves. They also take larger, less quickly moveable positions, hence your statement is correct in that context. However, technical traders and smaller retail traders who can be nimbler can easily trade lower timeframes, and the patterns you see on say, a 1min chart, are very much the same as you see on a daily chart. Take away the axis labels and you'd have a hard time telling the difference. It's not noise then, it's...
institutional traders (IF trade manually) also scalp and trade 1M, 5M and 15M charts. Actually, less percentage of them trade large TF. Most of the time, they have no open positions left by the end of the day. They also are technical traders, use MAs MA crosses and other tech analysis tools. Nowadays, most institutional trades are based on algo and trade tick charts holding positions a few seconds.
the masses are fed with too much BS about institutional traders and there are just too many myths about them.
As Above, So Below
  • #15
  • Oct 25, 2018 8:57am Oct 25, 2018 8:57am
I agree with the points of "Oldtraderman", there is no difference in timeframes. By changing the timeframe- is changing only the period of the candle built in minutes, hours, days... Some traders prefer to trade on higher timeframe (H4 ; D1), because they keep the position open more time, in order to wait for more pips changing. In regard of the difference between retail and professional- if you don't have the required evidence for professional categorization- you are a retail client However, both type of traders are able to make profit. Probably the traders should be classified as "newbies" and "experienced".
  • #16
  • Oct 26, 2018 9:07pm Oct 26, 2018 9:07pm
Trading Forex profitably requires that you employ a definite strategy. There is no right or wrong way to trade, rather what is important is for you to determine the one you will adopt.
  • #17
  • Oct 27, 2018 5:52pm Oct 27, 2018 5:52pm
Quoting FXtrader22
hi, is it even possible to trade low timeframes successfully? Do all professional traders trade only like H4 and up? What are are the distinctions between retail traders and institutional traders? Why can’t retail win as good as institutional? How does one create a stable trading portfolio? For example I hear if you buy USDJPY then don’t buy GBPUSD because you’ll be going against yourself, buying and selling USD together, but both always have different volatility that widely ranges so how do you calculate what lot size.... hope a pro can give a...
I know couple of successful Forex traders who are scalpers mainly! In addition, they mainly focus on lower time frames (below h1).
  • #18
  • Oct 31, 2018 7:07am Oct 31, 2018 7:07am
Good screenshots Tyrakay It is no way to know "which one is which one", they just looks the same. That's why I treat the different time-frames only as a candle built period. That's why it is truly possible to make money on every time frame- just should know how to do it
  • #19
  • Nov 16, 2018 2:15am Nov 16, 2018 2:15am
M1 is my favorite time frame. The known as Short Term trading, covers a period lasting from seconds to several minutes in duration. Therefore, market volatility and trading frequency tends to increase significantly as I trade in these shorter time frames, often I must be more focused and concentrated. At the end of the day I can say I made frequent small profits.
  • #20
  • Nov 19, 2018 9:57pm Nov 19, 2018 9:57pm
Quoting DwainUK
Good screenshots Tyrakay It is no way to know "which one is which one", they just looks the same. That's why I treat the different time-frames only as a candle built period. That's why it is truly possible to make money on every time frame- just should know how to do it
Yes, it’s possible! But higher time frames are relatively stable than the lower time frames! As a result, a number of traders are interested in only higher time frames!
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