BSE Day Trading Time Frames

What Time Frame Should You Trade the BSE?

How will you know if the trend is up for all BSE stock traders?

You see it's impossible to determine trend until you know what time frame you are talking about. The trend can be up because someone is trading on a daily time frame yet for another traders the trend can be down been up as he only trades the BSE on an five minute chart.

One of the main reasons I see traders not do as well as they should is that they are trading the wrong time frame for their personality. In the normal course of events someone learning to trade will either educate himself by taking a course or reading relevant books. In order for the person giving the course or writing the book to demonstrate his point he will have to use a particular time frame. This often becomes the student's time frame by default because that is how he learnt.
 

In today's electronic world many new traders start off by studying very small time frames such as 1 minute and 5 minute charts. This often leads them to get frustrated and to become anxious when they trade because it is the wrong time frame for their personality. Let me just add here that there is nothing wrong with trading any particular time frame just be sure you are trading it for the right reasons.
 

So what is the right time frame for you? Well, it all depends on your personality. You have to feel comfortable with the time frame you are trading in. You have to feel at home with that time frame. There is always a degree of pressure when you trade because there is the real potential for loss or gain and that will effect you to some degree. You should however not feel that the reason you are feeling pressure or frustration is because things are happening so fast that you find it difficult to make decisions or so slowly that you get frustrated.
 

When I first started trading I started out trading on 5 minute charts. I traded on that time frame for years. Because it was such a short time frame and II always felt a bit unprepared regardless of how much time I spent preparing for the trading day. I also found that after a few years it was beginning to take its toll on my health as I never seemed to have enough time to do anything but trade. From the 5 minute chart I moved to the 10 minute chart and spent a month trading on that time frame. I then repeated the process with the 30 minute chart, 1 hour chart and 4 hour chart.  I eventually found that trading the 4 hourly charts made a lot more sense to me. As the time frame was much longer and trading signals fewer I found I had a lot more time to analyze the market and I never felt rushed.
 

On the other side of the coin I have a dear friend who trades the FTSE who just could not trade in that time frame. It would be to slow for him and he would get to bored waiting for opportunities. He feels at home trading a 1 minute chart and always feels as though he knows what's going on and has enough time to make his decisions based on his trading method. Yet another friend thinks that the 4 hourly chart is far to short a time period for him as he trades only daily, weekly and monthly charts. The point is only you can decide what is the correct time frame for your personality. You will also have to take into consideration the market you are trading and amount you have available to trade. Shorter time frames usually means that you can have better use of margin and stops loss orders can be much tighter. If you think the reason your trading is not going the way that it should but you believe that your method of trading is sound, it may just be that you are trading the wrong time frame and it is effecting you psychologically.
 

To sum up, if you have a solid trading plan and a sound method of trading your chosen market. You should be able to take that approach and apply it to any time frame. The question is if you could make the same amount of money trading any time frame which time frame would you choose. You will of course have to take into consideration that the time frame you choose does generate enough trading opportunities for you to be happy with the results. It is also worth noting that if your trading is going well and you are profitable then don't even think about changing time frames. As the saying goes ''if it ain't broke don't fix it.''
 

When you do eventually find the time frame you are happy with you can then start looking at multiple time frames to help your analysis of the market. We will be discussing multiple time frames in future lessons.
 

tags: BSE Day Trading, Trading Time Frames, BSE stock traders

Stock Trading lost in stoploss method

The most important, the most difficult, and the first skill that a trader must learn is to cut their losses quickly. It is essential (as we all have read many, many times); we only lose significant money by holding onto losing positions. So why do so many (perhaps all) of us find it so difficult? What is it about cutting a loss that is so hard? The answer, we believe, is in what we say to ourselves about what a loss means.

There is a natural tendency for most people, in any area of life, to not take responsibility for results and behaviors that appear negative. We want to see ourselves in a good light and it is tempting to try to avoid responsibility for acts that we consider bad.

I have noticed for example, that liars (I mean here people who habitually lie) do not see themselves as liars. For every lie that they are conscious of, they have their justifications. In their mind the lie would have been to save someone else's embarrassment or disappointment; something that allows the liar to feel that not only they are not acting deceitfully, but they are actually doing a good and kind act.

I remember once a teacher at my junior school crudely picking some bit of stuck food out of his teeth. After he had finished he justified himself by saying to us (8 year olds) that he only did it because he knew that we had no table manners. We weren't judging him; he was judging himself and using us as his scapegoat.

What we resist persists

We all lie to some degree and I don't have a problem with that; what I do consider important is how we explain the lie to ourselves. When you lie are you honest with yourself about it, or do you make up a story to yourself so you don't feel guilty? It is a difficult question to answer, but one that will say a lot about your trading.

The most important, the most difficult, and the first skill that a trader must learn is to cut their losses quickly. It is essential (as we all have read many, many times); we only lose significant money by holding onto losing positions. So why do so many (perhaps all) of us find it so difficult? What is it about cutting a loss that is so hard? The answer, I believe, is in what we say to ourselves about what a loss means.

It is the meaning we attach to a loss that determines whether we can accept it and let it go; or whether we refuse to accept it and in so doing hold on to it. What we resist persists. If a loss means something bad about you; if it means you're a loser, or a failure or just no good, or doomed to financial subsistence or whatever; then you won't be willing to accept it.

Too Big

Take it to an extreme, if it was a life or death matter, if you were going to be beheaded if you have a losing trade; you would never, ever, accept the loss, you would hold on for ever and as soon as the position was 1 point in profit, you would grab it immediately! Isn't that how many of us trade now?

If so, ask yourself what does a losing trade mean about you?

If a loss means something negative about us we won't want to accept it, this is human nature. We would rather hold on as long as we can and then, when we inevitably have to take the loss because it is now too big; too big to hide, too big to ignore, too big to refuse to accept; we look for our scapegoat.

The 'they' of the market: the controllers, the insiders, the manipulators, or even the market itself; anything but to take the judgement that the loss implies. The objective of our self-deceit is to avoid the judgement that the loss imposes. In the same way that the teacher condemned the school children in order to avoid the judgement about his manners, so do we look to shift the blame to some third party.

Significance of Loss

The problem here lies, not with our self-deceit, but with the meaning that we attach to having a loss. If a loss means something negative, of course we don't want to accept it; but if a loss had no significance to us, accepting it would be easy.

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