Dr Barry Burns - Day Trading Tips: How To Choose the Best Chart Interval for Day Trading

Day Trading Tips: How To Choose the Best Chart Interval for Day Trading
By Barry Burns

One of the greatest day trading tips you'll ever pick up, is how to find the best time period for your charts.

Here are a 4 things to consider:

1. If your trading account is extremely modest and your greatest risk is a small percentage of that, then you may have to make use of an interval that is so fast that it's very noisy. Obviously that's not a good situation and the only way out of it is to have a larger investing account. Numerous traders are simply underfunded and this can be a large part of the cause for their failing.

2. The quicker the time frame, the less time you have for identifying and entering a trade. This can result in missing entries. How fast is too quick? The remedy to that varies from individual to person. It will depend on how quickly your brain and hands are! You'll simply realize that by trading and finding out for yourself. But if you discover yourself having a difficult time getting into trades that you observe, you may possibly want to go to a higher time frame.

3. The psychological need for trading frequency. This is just one of those day trading tips that is rarely discussed. If you go to a chart interval that is too long, then your trade frequency may get beyond your attention span. Longer-term intervals are good for proving much more precise signs, however they provide fewer trades in a provided period of time. This may contribute to missing trades, not due to the fact the market is moving too fast, but because there is so little for you to do, that you get diverted and do not notice the configurations when they come.

4. You may possibly additionally want to utilize a time period that is very common. This particularly is applicable to minute charts. 5 minute charts and 60 minute charts are extremely common time frames and it may be helpful to make use of these simply to see exactly what everyone else is looking at.

Many traders utilize what I refer to as "magic numbers" pertaining to chart periods - usually Fibonacci quantities - imagining they possess some significance. In my view, that is a completely useless method to select a time frame.

The above recommendations will supply a chart interval that is actually based upon finding the time frame that is the finest intersection of smart money management principles and your own trading psychology needs.

Following these 4 rules will provide you a "meaningful" way to uncover the best time frame for your stock chart, and this can be one of the best day trading tips you can take to heart.

Dr. Barry Burns is the owner of Top Dog Trading which beginning and advanced traders with many unique day trading tips.

He started his study of the markets under the direction of his father, Patrick F. Burns, who became independently wealthy through trading and had over 70 years of trading experience before passing away in 2005. He has been the featured speaker at DayTradersUSA, and developed a 5 Day Course for WorldWideTraders. Dr. Burns has been a headlining guest speaker for the Market Analysts of Southern California, given seminars around the country at many Wealth Expos as well as many Traders Expos, been interviewed on the Robin Dayne Elite Masters of Trading Radio Show, and is the former moderator of the FuturesTalk chat room.

He has a doctorate in Hypnotherapy and is a certified NLP practitioner, and therefore able to help people with the psychology of trading.

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Dr Barry Burns - Top Dog Trading - Trend Trading Tips for Swing Trading and Day Traders

Join at http://www.topdogtrading.com The Top Dog Trading method is a robust method that adapts to anytime frame (swing trading or day trading) or market (forex, futures, stocks, commodities) you may be trading. Join at http://www.topdogtrading.com

Dr Barry Burns - Day Trading - My Favorite Setup

Join at http://www.topdogtrading.com The Top Dog Trading method is a robust method that adapts to anytime frame (swing trading or day trading) or market (forex, futures, stocks, commodities) you may be trading. Join at http://www.topdogtrading.com

How Day Trading Works According to Einstein by Dr. Barry Burns

One of the most common mistakes novice day traders make is thinking that there is any stable reality to trading the markets.

There isn't. It's all relative.
Knowing this can actually make your trading more simple and allow you to trade with more confidence and higher profits.

We'll explore the concept in this article by discussing one of the most basic concepts of technical analysis: trend.

Traditionally an up trend is defined as a market making higher highs and higher lows, and a down trend is defined as the market making lower highs and lower lows.

You could look at a 2 minute chart of any market and find a period of time during which the market is in a down trend. But does that mean that "the" trend is down? Not necessarily.

If you look at that same point in time on a 60 minute chart you may see that what looked like a down trend on the 2 minute chart was actually a very brief retrace in a strong up trend on the longer time frame.

And you can take it much further.

You can look at a 1 minute chart, a 2 minute chart, a 3 minute chart, a 5 minute chart, a 10 minute chart, a 15 minute chart, a 30 minute chart, a 60 minute chart and even a daily chart ... and they are all going to look a little different, giving you different perspectives on "trend."

So which one is the real trend?

None of them!

It's all relative.

I know people who trade with many computer monitors because they watch 4, 5, 6 or more time intervals of their market concurrently. This is a mistake because it only leads to confusion. It's too much information and completely disorienting.

Einstein said that we should make things as simple as possible, but not simpler.
While he wasn't' referring to day trading specifically of course, it's good advice for every area of life, including day trading.

Since everything is relative based on the point of reference you establish, what a trader must do is simply choose a time interval they are comfortable with (based on the speed of execution required, the risk involved, trade frequency, etc) and establish that as your set up chart.

Then I recommend that you also use one more chart of a higher time interval (I use one that is 3 times the length of my set up chart) so you can see the market from one other perspective. This gives you a bird's eye view of the market and allows you to witness a "bigger scale energy" so you know if it is working with you or against you.

This will keep your trading simple ... but not too simple.
Dr. Barry Burns is the owner of Top Dog Trading and writes a Day Trading Blog. He offers a 5-day free video trading course which provides more training on how day trading works to help traders become successful.

He started his study of the markets under the direction of his father, Patrick F. Burns, who became independently wealthy through trading and had over 70 years of trading experience before passing away in 2005.

He has been the featured speaker at DayTradersUSA, and developed a 5 Day Course for WorldWideTrders.

Dr. Burns has been a headlining guest speaker for the Market Analysts of Southern California, given seminars around the country at many Wealth Expos as well as many Traders Expos, been interviewed on the Robin Dayne "Elite Masters of Trading" Radio Show.

Dr. Barry Burns was the former lead moderator of FuturesTalk chat room where he would guide listeners through the open and close of each trading day.

He is has written many articles for various outlets including eSignal Central.
He is currently one of the featured Experts at TradersKingdom.

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