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Hey everyone, i am a beginner trading with a small account and therefore, sometimes (actually most of the times) when there is a good/strong signal bar and i want to place a trade, my stop has to be at a price where the amount of money at risk makes it too big for me. So what should i do? I realised that if i traded a 3 minute chart (wich is the smallest timeframe that Al says to trade), i dont really have this problem or, should i still trade the 5m and find entries on the 2m for example?
I always thought Al suggested the daily chart for beginners, which he basically describes as anyone who isn't consistently profitable. and then shorter once you are advanced. Happy to be corrected if I am wrong?
>>I address the reasons in the Brooks Trading Course, but the most fundamental one is that these charts do not give traders enough time to think clearly. This results in them making too many mistakes. A 5-minute chart is a good place to start, and I recommend avoiding any chart where there are more than 20 bars per hour.<<
The above extract is from Al's "My setup" article under "Learn to Trade" menu. Using this guideline you can try the 3-minute chart as you rightly suggested. The extract is for Steven's benefit as Al has never said beginners should trade a daily chart with its attendant high risk. Study the daily along with other timeframes, but only long-term investors/traders use such a timeframe to trade from.
The market is quite volatile so we do have to wait for good setups that can be taken safely. As Al says we usually only get 2-3 swings trades a day. So patience needed. Hang in there. 🙂
