Everyone thinks that taking the trades in the retail trading industry is all about the selection of the time. The novice traders are given specific guidelines to stick to the higher time frame trading strategy. But do you really think we can never learn to trade in the lower time frame? Well, the lower time frame trading system is extremely complex and it requires strong analytical skills. Unless the traders have strong knowledge about this market, they will never learn to trade in the lower time frame.
There are few methods to follow to become a professional short-term trader. In this post, we are going to share some valuable advice that will help you to trade the 5-minute time frame just like an elite trader in the Hong Kong trading community. So, without any delay, let’s jump into the details.
Movement of the price
The movement of the price in the lower time frame is extremely unpredictable. It changes its direction many times and even creates a false spike. So, if you are not good at analyzing the price movement within a short time, lower time frame trading is going to be a tough task. You should have the skills to determine the direction of the price movements just by seeing the formation of the candlestick patterns. For that, you might have to spend few months observing the price movements in the demo account.
Looking for the critical levels
While trading the 5-minute time frame, you should be looking for the critical levels in a very strategic way. The support and resistance level which you will trade should be considered as minor trading zones. So, without having the price action confirmation signals, you should not take any trades. It might take some time to learn about the price action trading strategy but it is the only way by which you can prepare yourself to deal with the lower time frame data. Visit this page and learn more about the support and resistance level as it will make you much more confident.
Learn multiple time frame analysis
The professional traders who trade in the lower time frame often learn the multiple time frame analysis processes to find reliable trade signals in the market. By using the multiple time frame analysis methods, a trader can easily find profitable trade signals with a high level of accuracy. But if you become confused by seeing the different formations of the candlestick patterns in the different time frames, you should be giving priority to the higher time frame. If you still remain confused, avoid taking the trades.
Trade with the trend
Being a lower time frame trader, you should always trade with the trend. Find the trend of the market in the daily time frame and try to stick to the direction of the trend in the lower time frame. Once you start trading the market with a lower time frame, you should be able to make a consistent profit without having much trouble. But remember, a trend trading strategy is not always going to make you rich. You need to be prepared to deal with the losses and then you can make a regular profit without having much trouble.
Lower down the risk
You should lower down the risk factors in the trading profession. If you trade with more than 2% risk, you will be in great trouble. If possible, start trading the market with 1% risk exposure. By doing so, you will learn a lot about this market. But if you trade the market with high risk, you are always going to lose money and thus you will mess things up. Never become overconfident with the trade setup and start trading the market with extreme risk. Keep your trading account leverage low so that you don’t have the power to buy the asset with extreme lot size. Once you start following this safety protocol, you should not have much trouble making consistent profits.