Longer vs. Shorter Time Frames: I Trade the Daily Chart, but I Enter Even Earlier Than What 15min Chart Says

Chris taught me to trade the candlestick signals and patterns when I couldn’t even turn on a computer. Maybe the reason of my success was that I knew nothing before and I fully trusted Chris and followed what he said exactly. I merely did what he told me to, nothing more or less. I never thought that I was smarter than him and I could trade better than him, because it was stupid to think like that about someone who was much more experienced.

If I trade a little differently, it is because I spend more time on my trading, whereas Chris doesn’t like to do that. In spite of this, I still do exactly as Chris has taught me, because it works.

I enter based on the daily candlesticks. Of course I also take the weekly and monthly trade setups. But my daily trading routine is based on the daily chart: I Trade the Daily Chart, But I Am a Day Trader

Chris only follows some of the very special and strong candlestick signals and patterns, but I also trade some more signals that have been also taught to me by Chris. But it is several years that Chris doesn’t trade those patterns anymore, because as I said he doesn’t want to spend more time on his trading business.

Today I am going to tell you something even more important than my trading system. I check different sites including LuckScout and I see that although it is always mentioned that trading shorter time frames and things like news trading are wasting of time and money, still many traders try to trade the shorter time frames, or get in the markets right when the important news are released.

I know you are in rush to make money, but if you really want to make money you have to stop following the shorter time frames. Having more trade setups and opportunities through the shorter time frames doesn’t mean more money within a shorter time. It means more losses and headaches.

If you like to make profit consistently, the most important thing you have to do is that you only follow the daily and longer time frames. I know something in your mind says it is too boring to wait one day, week or month for a candlestick to close. Yes, you have to wait for 24 hours for a candlestick to close on the daily chart, but when you check several currency pairs every day and a couple of them form a trade setup, you will have even more trading opportunities than following the short time frames that make you sit at the computer for several hours per day.

It is good to know that I enter even earlier than a 15min chart when I trade the daily chart, which means unlike most traders think, trading the shorter time frames doesn’t equal entering earlier and with a better price. How is that possible?

Sometimes, when I make a good winning trade, I refer to the shorter time frames like 15min to see how I would take that movement if I wanted to trade it based on the 15min chart. In most cases, I not only have a better entry (although I enter the market after the daily candlestick close), but I make more profit compared to the trade setup the 15min chart forms.

It is not only that. If I wanted to trade the 15min chart, I would have to sit at the computer for several hours waiting for a trade setup to form. And most probably I would miss the setup because I would fall asleep in front of the computer 🙂

Let me show you one of my most recent trades (this article was published originally on Dec 12, 2016).

One day, I took a long position with EUR/USD. I don’t say why, because I don’t want to talk about the trade setup in this article. There was a long trade setup for me based on the candlestick signals on the daily chart. After I entered the market, EUR/USD went up for about 145 pips. I get out with a good profit, but one of my positions was still open while the stop loss is moved to breakeven:

My Long Position on EUR/USD Daily Chart

Now let’s see how I would trade this up movement if I wanted to follow the 15min chart.

There was a resistance line on the 15min chart. If I wanted to trade with this time frame, I would wait for the resistance line breakout, because candlestick signals can hardly be trusted on the short time frames like 15min chart. As you see, there is no reliable candlestick signal on that period of time (the below chart).

If I had entered after the resistance breakout, my stop loss would be triggered, because the price violated the line after its breakout when it retested the broken resistance. So I would have a losing trade first:

Trading the 15min Time Frame

Then I would have to adjust the resistance and wait for another breakout while I would have already entered at 1.2423, which was a much better price, through the daily time frame:

Adjusting the Resistance Line on 15min Chart

So finally I would go long and could catch a 90 pips upward movement. But the question is how many hours I would have to sit and monitor the 15min chart and then enter with a price that was tens of pips higher and would make a much smaller profit for me?

The resistance breakout formed 68 candlesticks after I went long based on the daily chart. It means the 15min charts’ long trade setup formed about 14 hours after. Could I sit at the computer for 14 hours? I would miss the setup definitely. Besides, I could not be able to catch a 140 pips movement, and I would have a losing position before having the winning position too.

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What Does It Mean to You?

It means trading the shorter time frames doesn’t mean more trade setups and profit. It can even result in more losses and smaller gains. Trading the shorter time frames means sitting at the computer for several hours per day and missing many of the trade setups.

Published by

LuckScout Team

"Whether you think you can, or you think you cannot, you are right." - Henry Ford

57 comments:

  1. Thanks Mr Kamel, hope you’d share some of your other strategy with us pretty soon.

    Honestly this site has just what could have cost my years and more pains to learn, I found it so simple here.

    Hello mentor. I opened a cent account, and my practice continues there, and just to inform you that I am doing fine, My one dollar has increased to 5. when I am done learning, I will move to a more reliable broker with reasonable money. I think I learn fast because I share the same thing with Mr Kamel (spending more time on the computer).

    Thanks and your crew.

    1. Cutiekc,

      Spending more time by Kamel doesn’t mean he sits at computer for several hours per day. I check my positions once every day, but he does it a couple of times per day. That is all. Spending more time doesn’t make sense when there is nothing to do. We check the charts, take the positions, and come back the next day. There is nothing else to do.

    2. I understand, in my own case, I read 2-3 of your articles daily and try searching and studying the way they work on the daily, weekly and monthly time frame.

      I am still following your foot steps.

  2. Dear Kamel,

    Would you be so kind to share more about your strategy and trade setups? I like your articles very much and i’m still wondering what are your other kinds of setups. I know every single article from this site but i still can only guess why EURUSD was a good pair to go long (something with lower shadow).

    Thank you guys for all the great job you make here.
    Best regards

  3. Hi and Kamel,

    If there is a strong trade setup on longer timeframe, I usually have to enter 15-20 mins before the candle close or enter 20-30 mins after the new candle formed, due to the spreads suddenly mark up a great deal. Some pairs can go as high as 22pips while others are within the 2 pips to 6 pips range. During normal circumstances, the spreads are usually below 1 pips to 3 pips.

  4. Hi Kamel,!
    Thank you for another wonderful article.
    I guess this strategy is related to Bollinger Middle Band.
    Will you publish this trading strategy?

  5. Thanks Kamel!

    Once again thank you while we await the exposition of those candlesticks pattern you add to your trading strategy and the setup that convinced you to take the long position in a very bearish EURUSD trend.

  6. Thank you for this article. You and have converted me from trading smaller time frames to daily and weekly only using just BBs and candlesticks. I know that your entry signal is beyond the scope of this article but would appreciate it if you could share that. I see a bullish engulfing pattern breaking through the 20 SMA. Did you wait for a retrace before you entered, If so, how did you determine the size of the retrace. Looking forward to your continued posting on this excellent site.

  7. Hi

    It seems that USDCHF has bounced off the 50-EMA today and is in a fairly strong up trend. Maybe this is covered in the 50 day moving average strategy?

    Thanks

  8. – please also look at the Cad/chf daily. Strong breakout from lower BB yesterday and today daily candle is engulfing last two days of daily candles. Thanks

  9. Hi,

    Can you please check the cad/jpy when the daily candle closes because I see it a bullish engulfing with lower BB break. How do you rate it? Is the bullish candle too long?

    Thanks

  10. Thank you Kamel..

    Very interesting article indeed. I’m also joining the LuckScout followers in encouraging you to kindly share more info on the other candlestick patterns that you consider and how you take positions based on them. That would be really awesome!! I hope in the end you do end up feeling like doing it as you hinted above.

    Many many thanks!!

    Ted

  11. Hi

    I just wanted to thank you for your analysis. I learn a lot! I try to analyse the charts by myself (like we all do) and then refer to your analysis for the final say so to speak. It takes time but I guess that’s an expense that has to be paid to become a trader.

    Thank you once again.

    Ted

  12. Hi. It has been around a month i havent taken a position until yesterday when i saw the formation of the candlestick on the eurcad with the long upper shadow and all breaking outside the upper bb. I went short at the close of this candle and now m in profit. Was i thinking right when i went short? Or was it risky. I saw ur analysis but it was tok late i went short before

  13. Hi,

    I really liked this article because Kamel told us how he learnt from You in the same way that us followers of LuckScout should do!

    This is how I set myself to learn from You also, and I hope I will understand Your teaching in the right way and keep on the right track!
    All my thanks to Kamel and I wish He keeps writing when He feels like doing it!

    If I may also give You some feedback I would say that the format of You introducing the article of Kamel, is very useful to understand it better! You talk about him first and then he talks and this sum of perspectives is very educational to us readers to find our way to trading!

    When You say he sets a much tighter SL, there is one thing I would like to ask:

    if I take a tigher (and therefore riskier) SL at middle of the candlestick, does this mean that I also have to put the TP1 at 5x of the riskier SL, or I can use the riskier SL and put the TP1 at 5x of the safer SL?

    The riskier SL would allow me to enter the trade with the correct position sizing even if my account is not big enough for the safer SL, and in the meantime I can benefit of the 5x safer SL profit if the trade goes in the right direction!

    Thank You!

    1. Hi,
      I don’t know sometimes my comment get truncated and display only one paragraph.
      Anyway I was just reminding you to advise about the cad/JPY bullish engulfing setup that was firmed yesterday 17 dec . Is it 100% setup?

      Many thanks

  14. Hello,
    Honest thanks once again for sharing such a valuable information here. I am also so interested in trading for long time frame like daily. But I have some questions to know that I have just only $30 in my account. With this poor money can I do daily time frame based on candlestick pattern? If it is possible then what will my lot size. target and stop loss size also?
    Thanks

  15. nice to read …but it would be nicer to know how to look for the set up so your subscribers could trade daily chart using 15m tf for entry…thanks kamel

  16. Hi Kamel,

    It is interesting to note that you do not have BB on the chart. I also note that the chart has an inside day(one bearish pinbar-mother, and the child a bullish pinbar. They both have equal tail lenghts at both ends).

    This is followed by a gap up forming a dark cloud cover with a tail indicating a bullish pressure. This bearish candlestick is the second son of the same mother. This is when you go long after this candlestick closed.

    This now bring to my mind some questions concerning the rational behind this trade.

    How were you able to know if the price will go up? is it because of the previous trade setup or bullish pressure you noticed from the tail? or the bulls are still strong?

    How will you react if it is an hikakke or a fakey?

    The last two candles are also an inside day. Are you going to wait for the breakout of mother low or high?

    Is there any other method to your analysis? Please enlighten us.

  17. Hi Kamel,

    I noted that you don’t have BB on the chart. It is also interesting to note that prior to your entry, an inside day was formed (mother bearish pinbar and child bullish pinbar).

    This is followed by a dark cloud cover (second child) with a tail that signify a bullish pressure.

    This has brought some questions to light.
    Is the market a bullish one and is the trade a continuation? Are the bulls with the control?

    How will you react if it is a fakey or an hikakke?

    A new inside day has formed on the chart. Are you going to wait for low or high of the mother to be broken? Please enlighten us.

  18. Hey Kamel!
    My curiosity wants to know what was your conviction that the resistance will break and the support.
    and if now you feel you can share some more trade setups/patterns its ok (yn)

  19. Hello, I would like to ask about an advice that Kamel gave us in this article ( https://www.luckscout.com/i-am-a-good- -trader-what-is-my-secret/ ) Here he`s saying “I don’t get emotional so easily, however I prefer not to check the charts and my positions. I take the positions, set the stop loss and target and then I come back the next day.”

    But now you are saying “For example, he is used to monitor his positions more than what I do.” I just can get it. Which of those two statements is right, and why there is misunderstanding between you?

    1. I find your comment very curious and strange.

      First of all, we do not know if Kamel is also following other short-term strategies besides the daily trades and which necessitate checking the charts more often.

      Second, Kamel is simply telling us his preferred routine is to check back on his trades the next day, which is good advice for those who trade the daily charts, lest we be spooked by the intraday moves. Nothing says one cannot or should not check more often when the opportunities arise or when one simply wants to. I happen to trade only the daily charts and frankly don’t see the need to monitor my trades during the day. But on the days when I have to remain online doing something else, I do check them often simply because it is very easy to click on the platform to take a quick look; that doesn’t change the central thesis at all.

    2. Actually there’s a much simpler way to answer your question.

      It is entirely possible trades the weekly and monthly charts exclusively and checks his charts only once or twice a week. Anyone who checks even once everyday is definitely doing it more often than he does. In other words, without knowing the details of their trading activities, any contradiction is in your imagination, not in the two quotes cited.

  20. Hi Kamel

    Thank you for your sharing.

    Candlesticks language is so powerful.

    I hope you will write more about your system and What you see in 15 min chart to take action.

    Thank you!

  21. I think almost everyone is convinced that looking for trade setup on short time frame is time wasting …. thanks Kamel for the article.

  22. hi
    based on your trading strategy , H4 time frame is shorter time frame or not?
    ?in what condition we are allowed to use it?
    thanks

  23. Thank you Kamel and Master for great teaching…articles
    I start to love and like longer time frame..because like you said shorter time so much noise and unpredictable..my question is how novice trader like me only had $500 trade for example daily time frame? If open one position , for 1$ then my risk stop loss is $400 how could it be?
    Maybe this is the reason why mostly trader trade shorter time frame, not a huge stop loss..as you always suggest ..tq

  24. Thanks for the answer and Kamal,
    Now I understand..It is easy for them who had big account like $10.000 to grow their account to $100.000 than the trader who had smaller account like $500 its impossible to grow it to $100.000 even they routine trading for 3 years..am i right??
    what I mean is bigger account could hold position until weeks..while small acount cant do that…
    So those are the problem of most traders…not because they dont like longer time frame like daily , but because they have only a piece of cake Account..
    I wish you have a solution for us who have small account..Thanks

  25. hi joshou
    actually you do not have any problem.with $500 you can have at least 2 positions with S/L 100 pips and lot 0.1. how many position do you want to take each week? 2 position is enough?
    Mehdi

  26. Thanks for the Answer Mehdi ..for me its like a morning star that grows after darkness night..it means i still have hope to face the Giant Market..with a butcher knife in my hand..do you hold your position for several days..

  27. hi chan
    it depends on the situation. some times my position take my TP just in 3 days. but mostly in a week will be in end. 3 times profit is enough for me. test it.

  28. Thank you Mehdi ..Do you already trade in live account or demo account??
    which broker do you use??..can u email me by personal email..?
    do trade like open 2 position at the same time?..one has stoploss and the other no stoploss..?Kindly waiting

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