Trading Forex with Daily Price Bars
 Submitted By Michael Michaud
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So many forex traders are trading the currency market in 5, 15, 30, 60 minute, and 4 hour time frames.
Why not trading the forex market with daily price bar time frames just like stocks?
Daily bars help remove all the intraday noise from the situation and show the current real trend that that may or may not be in place. The primary trend has the ability to earn investors and traders the most return with the least amount of risk than any other type of investing trading there is.
Trading daily price bars creates the need to increase stop-loss targets compared to intraday trading, so lesser leverage is very much advised. Over leverage is a very common reason small traders blow out their accounts in short amounts of time, so lighten the leverage and don't be so greedy so fast.
Lesser leverage is good for a number of reasons.
First, lesser leverage allows for intraday volatility to not affect your stop-loss, and or the market going on a stop-loss hunt when there is nothing else happening to move prices.
Second, lesser leverage allows a trader to capitalize on the real current main trend of the market, so big profits can still be realized, but with a longer time period involved, and getting rich from forex trading slowly is better than cooking your account within the first week of trading a newly opened account.
Bigger forex players trade with stop-loss of 200 pips or more with the potential to make hundreds of pips from the main trend, which is very possible over time.
Below is a current daily price bar chart of the EURJPY with the MACD Indicator. As you can see the EURJPY is in a downtrend currently with the MACD Indicator confirming such.
Click the EURJPY Chart for a larger view.
I trade Elliottwave, which is based on market psychology and sentiment, and it's repeating patterns in the markets to provide low-risk high-reward trades and investments.
The 3rd wave of the 5 wave Elliottwave pattern is commonly the longest and strongest of the other five waves.
Based on this, I'm suggesting to short EURJPY and go with the the number 3 wave downtrend with a trade plan and price targets as follows.
EURJPY Current Price: 123.72
EURJPY Entry Price: Your Choice
EURJPY Stop-Loss: 125.50 or Higher
EURJPY Take Profit Price Targets: 116.22 to 115.57, and 106.94 to 106.35
These price targets are very significant amounts of pips of return if proven correct.
Base your stop-loss on the major support and resistant price points, and not just on the previous daily price bar. So your stop-loss could be anywhere from 200 to 500 pips depending on the current situation, and currency pair, so trading with very light leverage in this case is an absolute must.
Try trading with daily price bars. You should be less stressed than staring at your screen all day long trading intraday.
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