Podcast:

Do you want to trade 5 minute FX charts?
In this weekly video:
00:22 – Should you trade 5 minute charts?
01:05 – Unrealistic way of trading – too much chart time needed
01:48 – Trading at silly times of the morning
02:45 – Less strength on a 5 minute chart
03:32 – Trading the W1 and D1 charts while in the US
04:22 – Less than 1 hour per day to trade full time
04:50 – 14 Continuation pattern trades made +5.5% gain last week
06:08 – Software to trade offline charts
06:34 – Conclusions?
Why should you trade the five minute forex charts? Let's talk about that and more right now.
Hey, forex traders, Andrew Mitchem here, The Forex Trading Coach. This is video and podcast number 230.
Should you trade 5 minute charts?
I'm going to talk about five minute chart trades. Why should you trade them? Should you trade them? Let's talk about that and see what your answer is in a couple of minutes from now. The reason I want to talk about five minute charts is I had an email from a guy in the UK called Michael. He came to me and said, “Look, Andrew, I'm struggling with my trading. I purchased a course.” I'm not going to name you the course, but he said, “Look, I purchased the course, been doing it for a little while and I'm getting nowhere.”
I said to him, “Okay, so tell me about the style of trading.”
He said, “Look, it's all based on five minute charts.” Instantly for me that's like a bit of a warning system going off there.
Unrealistic way of trading – too much chart time needed
I said, “Okay, Michael, what's the issue? Why can you not trade the system?”
He said to me, “Well, it's requiring a lot of” his time, a lot of the chart time, like he's sitting at the computer a lot. He's got work to do. He's got a wife and kids to commit to. He said, “I just can't commit that amount of time to sitting there watching charts, and when I do sit there watching charts, I'm feeling like I'm forcing trades to happen. I'm overtrading. I'm constantly scanning different charts, different currency pairs. I'm on five minute charts looking for setup, scared to miss something, and almost like a gambling mentality, that constantly having to do something, scared to miss a trade.”
Trading at silly times of the morning
He also said that he has a mentor with his course who's over in America. He gets up at like three or four o'clock in the morning to trade the European session. Michael's there trying to go to work, and he's trying to trade. There's people getting up at like silly o'clock in the morning, crazy times in the morning, to trade these five minute time frame charts because they think they have to be there at that time trading these short time frame charts. You can get where I'm going with this. To me it's crazy. It's not sustainable. Even if you're making money from trading five minute charts, if you want to do that then maybe select say like an hour or so at a time that you're going to sit and do that.
My system works on five minute charts but I don't trade five minute charts. The same principle applies, but the downside is also you have to commit yourself to sitting watching the computer. You feel like you're forcing trades because you think [inaudible 00:02:40], therefore I'm going to look for trades.
Less strength on a 5 minute chart
The short time frame charts, if you're a technical trader like I am, a five minute chart doesn't really have a great deal of relevance because they still do work technically, but they have less relevance and less strength than say like an hour chart, or a four hour chart, or a daily chart, something like that.
The other thing is also you have to be really careful and mindful of news e...