Red Light-Green Light. Trading in your time frame!

I can still remember when I was a young driver and getting stuck behind some old slow poke. When I was able to finally get past them, it was always an old person. So annoying, well at least they were older than me.

Times have changed and I have gotten older myself. There have been times that I have drove fast as I have gotten older, but now, I mainly drive slow and enjoy the journey.

So what does that have to do with trading? I teach a few courses about trading and I am asked a lot, what time frame do you trade and why. Here’s the answer. I hope your still with me and I am not talking to slow. LOL.

Trading the 15 minute charts for me becomes almost hypnotic. Drawing me in to almost becoming one with the charts and becomes a continuous battle in my mind of whether I should close the trade and take profit.

The analogy between the one hour charts and 15 minute charts for me is the following.

Consider two cars in a downtown area with the stretch of 20 red lights over 20 blocks with traffic. The one hour car stays in the middle lane of 3 lanes. The 15 minute car sways in and out of traffic, trying to beat the lights and get to the smaller targets, but never gets ahead unless by luck he gets a green light and breaks out. Otherwise he hits his target and looks for the next green light to go. At the end of twenty blocks the one hour car has calmly been staying in the middle lane until he gets to the last light. The 15 minute car is even with the 1 hour car at the end, if we were both driving to the same target, the last red light. But the work was a lot harder, more emotion was involved, and staring at the chart, watching price move at a much faster pace was just exhausting.

The 15 minute charts become a cycle of continuous trades and frustration for me, because of the red lights and hoping for the breakout. The one hour car does not look for a breakout because it is already included in the target. The one hour car does not care about the red lights because its start and destination are predetermined by a system set up that is put in as a pending order and then stuck too religiously.

Let’s just say I got older and I’m not as fast as I used to be! Enjoy the journey and trade happy my friends.

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