I remember one particular participant at an training event in SE Asia. He shared that he no longer did intraday trading. In fact, he only took trades (quite profitably) on the daily charts.
This is the comment he made…
“Those fools get caught in the intraday market trading 5-minute and 15-minute charts because they never think to look at what is really going in the market!”
A rather harsh statement, especially since I do trade intraday charts myself! However, he has an important point. Most “intraday traders” get caught up looking at only the lower timeframes. They never realise that intraday movement is determined by the higher timeframes. In this post, I will share a simple trick I learnt from a veteran bank forex trader (yes, an “insider” to the workings of institutional forex) that could change the way you look at intraday trading.
Essentially, intraday trading is taking part in a a bigger timeframe swing. If you are trading counter to the higher timeframe trend, you are probably playing a losing game. Note that trend, cycle and momentum are all considerations, but for now I will share just one trick that will help you massively in deciding the direction of the day.
Before you take an intraday trade, go to the daily chart. Place two simple moving averages on it: a 5-period and an 8-period. Now, VERIFY THIS FOR YOURSELF: When the 5 crosses above the 8, there will generally be more up days than down days. When the 5 is below the 8, there will generally be more down days than up days.
Isn’t this a very useful piece of information? Of course, in itself it is not enough to trade on, but if you know your trading bias for the day, you will stop getting lost in the jungle of the lower timeframe charts. When I learnt to orient myself to the daily chart, my trading improved dramatically.
With best wishes for your trading,
Kaye Lee
Private Fund Trader/Head Trader Consultant
www.straighttalktrading.com
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Well, its not like you cant make money doing Intraday Trading.
If you follow certain strategy, you will be able to make consistent flow of money.
In my opinion, its important to have professional guidance and disciplined approach while trading IntraDay.