Get these Correlation Trading Cheatsheets FREE. Download this 1 Minute Forex Trading System plus these 3 Swing Trading Systems FREE. Trading with daily charts and five minute charts require different strategies. If you are an impatient trader who wants to make quick pips than five minutes charts are best for you. And if you are a patient trader who can wait for a few days for a trade to complete, then daily charts are for you.
5M charts are ideal for day traders who love to scalp the forex market. Scalping is a trading strategy that entails quickly entering and exiting the market just in order to make a few quick 10-20 pips per trade. Now, there is a problem when you trade with the five minute charts. You will find a lot of noise on these charts.
The shorter the time interval you use on the charts, the more noise they will contain. What is noise? Noise is the random movement in the market. There are trading systems that profitably use five minute charts. Five minute charts mean a lot of trading signals and quick action. But the presence of noise makes many of these trading signals false. You will need a good and robust trading system to trade the five minute charts.
These false signals on the five minute charts will be a real problem and can make your trading system unprofitable. Plus the moves on the five minute charts can be really short something like 10-15 pips. But, if you are looking for quick trades than 5 minute charts are best for you.
24 Hour Charts in my opinion are much better. They have less noise and you can find high probability trade setups on these charts that can make you hundred of pips per trade. The good thing, you won’t need to monitor the daily chart like the 5M charts. Daily charts are ideal for end of day trading.
There are many good daily charts trading systems. 24 Hour charts are ideal for swing traders. Swing traders look for short term trends in the market that last for a few days. Using daily charts, you can enter those trends at the right moment and ride them till the end getting out just before the reversal making as many pips as possible.
Swing trading is best for those people who have regular jobs and want to still profit from the forex market. You can trade these daily charts at the end of the day after your job. Enter the trade, place the stop loss using the daily charts and set your profit target. Next day, again check the daily chart to see how well your trade is going, move the stop loss just to better your position. Simple!