The switch from hourly to daily...and the psychological ramifications... | Forex Factory

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The switch from hourly to daily...and the psychological ramifications...

  • #1
  • First Post: Oct 17, 2006 1:07pm Oct 17, 2006 1:07pm
As some of you know, I've started to turn the corner of consistent profitability. It's been a long haul. One of the things that I've asked myself, particularly lately, is how can I get rid of the addiction or need to trade?

So when I identified this, I instantly figured out what has been the big reason for me to sabotage myself for the past year -- I've been a slave to the charts!

So I've switched to daily charts now, utilizing my same system. I went from 1 hour, to 4 hour, and now daily. I really like daily charts. I don't feel like I am all nervous to have to look at the charts. Or wanting to get out early and not follow my plan.

I just thought I'd post this and see if anyone has had the same revelations that I have lately.

One of the things I worry about is that I won't be able to make as much money switching to a daily chart, but I've done my math, and I don't think it matters much. It's all relative!

Thoughts?
Mr. Trend
  • #2
  • Oct 17, 2006 1:14pm Oct 17, 2006 1:14pm
When I started trading the daily charts I thought the same way as you. I actually bring in a lot more pips with the daily charts, the charts almost give money away with easy to pin point S&R and price patterns. I trade nothing but what I feel to be perfect set-ups and haven't looked back sense.

The only negative part of the daily charts for myself is I have to utilize larger stops which means less per pip value to keep my account risk at around 3%-6%. The lack of capital is the only thing holding me back at this point.

I think you'll find the daily charts easier to read and cause less stress than the smaller noisy charts.
  • #3
  • Oct 17, 2006 1:19pm Oct 17, 2006 1:19pm
I don't trade daily charts yet, but I too have recently started to become profitable and attribute it to a similar reason. After 6 months daytrading/scalping on a live account I was tired of breaking even with gains wiped out by losses, week after week. Now I feel like I have the confidence to ride out a lot of the trades that I would have instinctively exited after being down ~35 pips. And more importantly, I don't get out of winning trades as quickly just because I want to take the profits and run. I'm trying to trade positions that last 24-60 hours now, and while its not as exciting, and takes more setup, it is more profitable.

Lesson: have confidence in your trades and don't be afraid to stick it out, so long as you do your homework.
  • #4
  • Oct 17, 2006 1:25pm Oct 17, 2006 1:25pm
you will most likely make money, but expect huge drawbacks, hence need extra balance. I would say, do NOT try to trade daily with the same balance you used for the hourlies. If you are OK to see big negatives for trades, you will make more money utilizing daily trades, I would say.
  • #5
  • Oct 17, 2006 1:29pm Oct 17, 2006 1:29pm
Quoting theroller
you will most likely make money, but expect huge drawbacks, hence need extra balance. I would say, do NOT try to trade daily with the same balance you used for the hourlies. If you are OK to see big negatives for trades, you will make more money utilizing daily trades, I would say.
If your risking the same percentage per trade, whether it be hourly or daily the drawdown will be the same.
  • #6
  • Oct 17, 2006 1:37pm Oct 17, 2006 1:37pm
Quoting Mr Trend
As some of you know, I've started to turn the corner of consistent profitability. It's been a long haul. One of the things that I've asked myself, particularly lately, is how can I get rid of the addiction or need to trade?

So when I identified this, I instantly figured out what has been the big reason for me to sabotage myself for the past year -- I've been a slave to the charts!

So I've switched to daily charts now, utilizing my same system. I went from 1 hour, to 4 hour, and now daily. I really like daily charts. I don't feel like I am all nervous to have to look at the charts. Or wanting to get out early and not follow my plan.

I just thought I'd post this and see if anyone has had the same revelations that I have lately.

One of the things I worry about is that I won't be able to make as much money switching to a daily chart, but I've done my math, and I don't think it matters much. It's all relative!

Thoughts?
Thank you for sharing this with us, Mr Trend.
This is actually my story as well.
Less stress and in many cases my limit orders are executed while I'm asleep.
Number of pips per month is almost the same, but I still fight the urge to scalp on 4hrs.
  • #7
  • Oct 17, 2006 1:39pm Oct 17, 2006 1:39pm
Mr. T.

Congrats on your decision to move to the dailys. It's a positive progression and the mark of a professional trader. I totally understand the trading addiction. I have been full-time for 8 years and trade both daily and intraday. My main profits come from swing trading which I find are much easier to spot and ride in the Forex market. I still sit in front of the charts about 4 hours a day and hunt and scalp for setups. I truly enjoy downloading all of the free and innovative indicators that are so graciously made available to us on the Factory. My hope is that when ski season begins in a few weeks, I will only anaylze the markets and my positions on a part-time basis. There seems to be huge demand from people wanting to learn this exciting business we are involved with and I am considering getting into the education/mentoring side of things. With 68 million baby-boomers retiring soon, Fx represents an excellent retirement income. I can only imagine how cool it would be to learn this profession as a much younger person. Enjoy your extended free time. If I recall from your previous posts, you always said you were in it for the babes. Enough Said!
Trade what you see - Not what you think
  • #8
  • Oct 17, 2006 2:56pm Oct 17, 2006 2:56pm
summit: I am a big swing trader myself. I just finally came to the realization that, ya know what, I just can't deal with the stress of intraday (1 hour or less) timeframes. I just had to sit down and admit to myself that I can no longer consistently lose money to the markets. Sure, I have done my homework, I have a good system, heck, I used to automate systems (that's how I know TRO so well -- back during the Tradestation days... heh), but at the end of the day, IT'S ME. I AM THE REASON FOR MY FAILURE!!

Intraday timeframes, FOR ME, was part of the problem.

Now I feel free. I can check for my signals at 5PM PST, once a day, and I'm happy. I feel like I don't have to get in a trade, and as someone else just mentioned here in this thread, I can look for those perfect setups... I don't feel rushed, and in essence, THAT will be the primary factor in my move to working for myself here in about two years.

It's, as if, the lights just got a bit more brighter... I already had my, "it just clicked one day", experience. Now I'd say the light is getting a bit more brighter...
Mr. Trend
  • #9
  • Oct 17, 2006 2:58pm Oct 17, 2006 2:58pm
Would you care to give us snapshot of your methodology?
Trade what you see - Not what you think
  • #10
  • Oct 17, 2006 2:59pm Oct 17, 2006 2:59pm
By the way, thanks everyone for the reassurance on the pip count for dailys... that helps me a lot mentally.
Mr. Trend
  • #11
  • Oct 17, 2006 3:01pm Oct 17, 2006 3:01pm
Quoting Mr Trend
As some of you know, I've started to turn the corner of consistent profitability. It's been a long haul. One of the things that I've asked myself, particularly lately, is how can I get rid of the addiction or need to trade?

So when I identified this, I instantly figured out what has been the big reason for me to sabotage myself for the past year -- I've been a slave to the charts!

So I've switched to daily charts now, utilizing my same system. I went from 1 hour, to 4 hour, and now daily. I really like daily charts. I don't feel like I am all nervous to have to look at the charts. Or wanting to get out early and not follow my plan.

I just thought I'd post this and see if anyone has had the same revelations that I have lately.

One of the things I worry about is that I won't be able to make as much money switching to a daily chart, but I've done my math, and I don't think it matters much. It's all relative!

Thoughts?
Hi

Excellent move from intraday to daily; in the meantime you may wish to talk about your trading system on dailies as well if you dont mind.

Howard
Regards
  • #12
  • Oct 17, 2006 3:01pm Oct 17, 2006 3:01pm
Quoting summitfx
Would you care to give us snapshot of your methodology?
I don't care to get into specifics, but it's so simple, it's silly.

Trendlines and Point Break (you can use Renko too, but I prefer PB) bar charts.

I use no indicators.
Mr. Trend
  • #13
  • Oct 17, 2006 3:09pm Oct 17, 2006 3:09pm
Quoting Mr Trend
I just thought I'd post this and see if anyone has had the same revelations that I have lately.
Did it myself last week, in fact I've got a trade on selected from the weekly chart of a cross pair.

Quote
One of the things I worry about is that I won't be able to make as much money switching to a daily chart, but I've done my math, and I don't think it matters much. It's all relative!
Thoughts?
I couldn't make anything on the short-term charts, probably an age thing; my brain doesn't seem to work quick enough to make the decision on shorter charts.
Now I can look at the bigger picture, spot the obvious danger areas, and keep the trigger finger still. I always made the newbie mistake of wanting to jump in on anything that looked remotely active.
I can now find time to make a cup of tea without twitching 'cos it's near a stop
  • #14
  • Oct 17, 2006 5:21pm Oct 17, 2006 5:21pm
I am also looking at the 4H and Daily charts. The last thing Forex should be is Exciting, too much emotion. Steady, predictable should be a better description. I look at my charts twice a day, waking and after dinner. Routine. I look for the setups if they are there, if not I do not trade. If I miss one, like a bus there will be another soon. As soon as it becones a solid routine I will move on to a live account, and try to keep the same pattern.

I wish Life was like a bowl of cherries, After you eat all of them you only have have pips left.

Labrat407

Quoting SKW322
I don't trade daily charts yet, but I too have recently started to become profitable and attribute it to a similar reason. After 6 months daytrading/scalping on a live account I was tired of breaking even with gains wiped out by losses, week after week. Now I feel like I have the confidence to ride out a lot of the trades that I would have instinctively exited after being down ~35 pips. And more importantly, I don't get out of winning trades as quickly just because I want to take the profits and run. I'm trying to trade positions that last 24-60 hours now, and while its not as exciting, and takes more setup, it is more profitable.

Lesson: have confidence in your trades and don't be afraid to stick it out, so long as you do your homework.
  • #15
  • Oct 17, 2006 5:46pm Oct 17, 2006 5:46pm
Your story sound just like mine 9 mos. ago. When I moved to trading off the dialy charts, my stress level went way down. I change my money management to fit and my emotions went away. So, it's almost 1 year for me ... I still use a lower timeframe to enter my positions. I wish u all the best with your trading.

Happy Trading 2 U ......
If it is not broken, fix it until it is!
  • #16
  • Oct 17, 2006 6:36pm Oct 17, 2006 6:36pm
Mr Trend can you and others post here some picturial examples with notes?
it would be greatly appreciated !
thanks in advance.
  • #17
  • Oct 17, 2006 7:33pm Oct 17, 2006 7:33pm
Mr Trend,

Considering that the traders sitting at the desk poised to take your money at brokers such as fxcm, cms, and many bank traders, if technically oriented, use a four or an eight hour chart, you are wise to move to a daily.

Drawdown, stops, entry do no thave to be any more or less than on an hourly chart, or a fifteen minute for that matter.

Scalping is an experts trade. If you don't believe me, look around at the newbies who try and scalp and blow up. You, however, have seen through the trees and now the forest is now at hand.
  • #18
  • Oct 17, 2006 7:45pm Oct 17, 2006 7:45pm
Quoting CurrencyShmuck
Mr Trend can you and others post here some picturial examples with notes?
it would be greatly appreciated !
thanks in advance.
Don't take this as trading advice it is in answer to your request, only.
Downside break of trend line, plain and simple. Element of risk (when isn't there?) as it's going with this week's bearish bias, but against a longer term bullish bias.
Stop loss around 50 pips
Attached Image
  • #19
  • Oct 17, 2006 7:57pm Oct 17, 2006 7:57pm
I went from 5 minute charts several years ago on my first run of this, to hourlies to start with this time, and now to four hour charts. It seems like the longer you do this the less appeal short time frames have. It's not a slot machine!

I still have to force myself to avoid the gambling impulse, though. I think I'll try daily charts for a while and avoid looking at my trades more than a couple of times a day. It is becoming apparent to me that long-term money is made on long-term charts...
"The time to act is when others show signs of tire." --W.D. Gann
  • #20
  • Oct 17, 2006 9:14pm Oct 17, 2006 9:14pm
Quoting Labrat407
I am also looking at the 4H and Daily charts. The last thing Forex should be is Exciting, too much emotion. Steady, predictable should be a better description. I look at my charts twice a day, waking and after dinner. Routine. I look for the setups if they are there, if not I do not trade. If I miss one, like a bus there will be another soon. As soon as it becones a solid routine I will move on to a live account, and try to keep the same pattern.

I wish Life was like a bowl of cherries, After you eat all of them you only have have pips left.

Labrat407
Hi Labrat407,

Just a thought you might consider. Since trading demo is nothing like trading real $ when it comes to psychology, you may want to find a broker that uses micro pips. You can still trade regular pipage but also have the choice to try micro. Fits with the methodology of moving from hourly to daily.

Lou

BTW... this thread is very confirming.
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