D1 Forex - what kind of chart of trading is this?Johannes Röll 05 / May / 20 Visitors: 9
In this article I will tell about the daily chart of trading in the foreign exchange market (D1), and I will reveal the advantages and disadvantages of working on it.
Before computers appeared, most traders had access exclusively to the daily schedule, which was drawn, besides, by hand. Therefore, all indicators were configured for this timeframe.
Most people trade today at H1 and below, up to М5 (although this is the most difficult timeframes). But the desire of beginners not to wait for months, but to profit within a few minutes or hours, pushes them to this mistake. And, often, they master excitement, and they start almost scalping on the М1.
Many say that trading on the D1 is possible only with a large amount of deposit. In fact, this is not true, because today there are very small lots (0.01). This volume may be sufficient to generate statistics and open a PAMM account.
Each trading instrument has its own risk-to-profit ratio. On average, when trading on Д1, it is recommended to use a ratio of one to three, namely: 1 teakprofite should be equal to 3 stoppers.
The level of risk you can easily calculate by knowing the maximum decline. Many traders are purely psychologically unable to allow the decline to be more serious than twenty-five percent. Assuming that when entering the market volume of 0.01 lots, a person will put up a stoploss for 100 points. Thus, his losses will amount to $10. But given that the maximum deposit drawdown that a trader can make is $20%, if $10 = $is the 20% deposit for such a strategy - $50. It is important to understand that by the right risk management drawdown on one transaction can be a maximum of 2%, and 20% of the drawdown is given on the whole deposit and on the whole trading strategy with all transactions.
The benefits of trading on the D1:
Given that minor market movements (market noise) do not affect the analysis, Д1 you will receive more accurate signals from your vehicle
Such a time frame gives an opportunity to trade in the foreign exchange market, continuing to develop its business;
It takes a minimum amount of time to analyze and trade, as D1 view the market situation only once or twice a day.
Here you will not experience such strong sensations and emotions as when trading on other timeframes. Thanks to this, your mind remains cold and clear, which does not allow you to make hasty decisions, but only helps to increase your deposit at times.
Cons of trade on D1:
A small number of transactions per month for this schedule;
A relatively small percentage of returns per year, compared to strategies on lower timeframes.
We sum up the results
Trading on the D1 provides a lot of time for reflection. But I do not advise to analyze the situation in the market for too long, a golden middle is necessary. Most often the first thought turns out to be the most correct (if you already have experience in trade).
You have to be prepared for the fact that in a time frame D1 sometimes you have to wait a few weeks for any movements.
Johannes Röll was born 1978 in Brilon,Germany. Graduated RWTH Aachen University. Over the past ten years he worked as Head of the plastic card team, where he was mainly responsible for the development of the distribution, Head of sales Department and Financial Analyst,where he got experience in planning and support sales figures for branches. For the present he works as freelancer