Many of us wonder, how a trader can be so consistent in making money in long term …Yes it is possible if we build an efficient system which suits our personality and stick to it as it takes many years to develop a profitable system which generate consistent return…
If we use smaller time frame in trading like 1 minute, 5 minutes or 15 minutes, we gonna get lot of noise and lots of fast entry & exit which lead to erosion of our capital like slow poison in no time .
If you notice many budding trader use lots of trading indicator like BB,EMA,RSI,MA etc. with smaller time creates more entry exit ( some indicator might give bearish signal or vice-versa which leads to confusion and convert into a wrong trade ).
But if you start using longer time frame like Hourly, 2H or Daily then you will feel the difference. One thigh I am not denying that you will get less or limited entry / exit signal but these entry / exit will provide you more clarity and better accuracy will help you to hold the position till trend ends .
As per NiftyTeam.in (Popular website for learning & chart analysis) study over past years… one trade with longer time frame can make more money for you than altogether with shorter time frame …….I will give you one recent example …
All of us are aware of demonetization & how market cracked 7-8% in no time (Bank-nifty slipped from 20300 to 18200 in just 9 days i.e. 2100 points fall, close to 10%)
I am not defending that you must catch all 2100 points fall or 10% move ….but if you are able to catch just 50% of the fall and stay with your position ,you can make big money ( Find Right Trade with Logic , Bet Big with Conviction & Stay in position till trend gets weak or change ).
Here if you trade with smaller time frame you will get 3-5 times or might be more entry /exit in a day, that will affect your holding and might keep you away earning big. Bigger time frame never gives frequent exit & help to stay in position with the trend.
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