Seems like everybody wants to focus on 15M and even 5M charts. While it's certainly possible to trade short term moves, and be successful at it, there is number of serious obstacles most new traders don't even consider.
Moves on short term charts are often regarded as “noise” by more seasoned market participants. These moves tend to be less suitable for charting applications available on most trading platforms. Doesn't really matter whether person is using Fibonacci numbers for targets, Gann angles, trend lines or any other generally acknowledged charting technique, the rate of failure using short time frame is always higher. Now, there are more trades, and, by extension, more chances to be right, but the costs of trading are also exponentially growing. That's disregarding emotional involvement, which could be rather taxing.
Perhaps most overlooked aspect of the short term trading is the lack of time necessary to do it. Vast majority of new traders hold jobs and/or have other commitments effectively making short term trading not a viable proposition for them, yet that's where their efforts go.
There is nothing wrong with starting from long term charts. Daily, weekly and monthly charts also present opportunities. It would take short time every day to review daily charts and maybe weekly charts over the weekend. Some might argue it's investing not trading. That's semantics and not worth discussing.
Chart by VT Trader™
NZD-JPY reached 87.00 late in 2005(1). After a sharp turn it fell to about 68.00 or 1900 pips(2). That move took about 6 months. Since then, NZD-JPY has been in a prolonged bull market. Recent highs of 97.00 probably completed almost 3000 pip move. (3)
Current chart looks remarkably similar to the picture of previous high. Chart patterns tend to repeat themselves. Judging by historical precedences, and employing some simple technical analysis, we are looking at a possible move to 77.00-75.00 area over next 6-8 months(4). These would be good gains by any body's standards. Monthly chart was used for this example.
There is no way of knowing for sure what's going to happen, but recent fundamental developments are pointing strongly toward weaker NZD as well. Not just against JPY but USD also, with NZD-USD being the pair that most, if not all, Forex brokers have available on their platforms.
There is no lack of potential in currencies trading. Even if you can't day trade, you can still easily participate in this exciting market.
Mike Kulej is a Chief Forex Strategist for Spectrum Forex LLC., and a creator of highly effective “Rainbow” trading system. He specializes in mechanical trading systems as explained on www.spectrumforex.com . Spectrum Forex LLC offers numerous services to individual traders. With questions and comments e-mail him at kulej@spectrumforex.com.