In the video I will add my personal opinion and understanding of trading price action on the daily chart compared to scalping price action on the lower time-frames.
I started my price action journey trading the higher time-frames, the only info out there was for the daily and 4hour charts. But became despondent with the results I was getting and began to question it’s viability at that stage in my learning path. I felt that it didn’t really suit my personality and thought there must be other ways to use Price Action. So I went about learning and developing my abilities to implement price action trading on the lower time-frames which suited my personality much better.
Two sides to a coin
I should add to this blog that longer term price action trading is definitely a great way to trade and is a very viable trading strategy. Is also a great starting point for those new to price action and also for those that are time poor. There is plenty of opportunity to make good rewards and your ability to pick winners will get better over time.
Trading the lower time-frames is not without additional risk as there are more opportunities to mess it up (more human error) and some people just wont be suited to sitting in front of their charts making decisions on a 5 min chart. There is never a right or wrong in this scenario, just what suits the individual circumstances and personality.
Why I scalp price action
- Limits my exposure to the mentality of carrying risk for longer periods of time (days or weeks).
- Realization of profit and loss quickly means I get immediate feedback.
- Allows for plenty of trading opportunities to pick and choose from during each trading session. This is great for learning and developing trading skills.
- Not being exposed overnight to news, political, economic events, natural disasters…
- Opportunity cost: So I don’t have my capital tied into positions that were going nowhere while missing other opportunities
- More profit potential. Not trading on the edge of profitability like the daily where one mistake turned a profitable week into a losing week.
What is your take on trading price action on different time-frames? Have you tried to trade off the daily and become despondent? Please use the comments section at the bottom of this page to further the discussion.