Making the Switch: From the 15m to Daily Time Frames

Last month, I failed my Funded Trading Plus challenge. This was due to making too many changes during the challenge (such as no longer being able to get up at 5am to trade the NY session and attempting to scalp trending strategies off of Asia instead) and also fumbling over my own discipline (pulling winning trades too early and taking trades that didn’t fully match my rules). 

It was time to take a step back and evaluate what was going on.

Since I first started learning how to trade stocks and onwards with learning to trade Forex, I’ve always sought out scalping strategies. I liked the focus that came with partitioning a set amount of time each day to watch the markets and know that my account was cleared and safe at the beginning and end of the session. It was tough to learn to scalp from the outset, as many professional traders will tell you, yet in time, I was able to make a profit. 

That is, until the last few months. 

I’m a big believer that your psychology and discipline are the most important edge in your trading success. And while most traders seek out a holy grail strategy and will spend endless hours researching ways to optimize their trading rules and analysis (to be fair, there’s merit in having a strategy that works), ultimately it will be your ability to make calm, responsible decisions that will determine your success or failure in the markets. 

So once you have a halfway decent strategy, the leg work that will improve your trading isn’t necessarily watching more YouTube videos on technical analysis. Instead, spending time strengthening your relationship with your emotions, taking care of your mind and body, and ensuring that your trading regiment is sustainable with your lifestyle will play a greater role in helping you rise in the ranks from beginner to intermediate-level trader.

Over the last few months, I fell out of sync with my trading regiment. 

Suffering from insomnia for many years, I was running into issues with waking up late in the middle of the night, or not being able to fall asleep until the next day. I started missing my 5:00am NY trading sessions or would wake up foggy and exhausted just to make mindless mistakes, like trading in the wrong direction or miscalculating position sizes. These may seem like silly mistakes, but their costs are severe when they add up over a consistent basis.

Even worse, when one doesn’t sleep well, it’s far more difficult to stay disciplined. Consider how often you’ve made naughty food choices when you didn’t sleep well the night before. The same thing can happen when facing your trading rules. 

I was forcing my lifestyle to my trading routine. 

To do so, I was muddling with my health and my ability to get enough hours of sleep at night.

This impacted other areas of my life as well, as I had to take naps in the afternoon and miss work sessions or class in order to get enough rest.

I forced my lifestyle to accommodate my trading under the assumption that I only knew how to scalp the markets and that New York was the only session that would fit my approach.

This is a big mistake.

You should never have to bend over backward to make trading work for you. 

Remember, this is more of a psychological game than a tactical one. 

Your trading style needs to fit your lifestyle, not the other way around.

Doing otherwise can lead to built-up stress, and other areas of your life going unnurtured, which come back full circle to compromise your ability to make calm, rational choices with your trading account.

Like a pro athlete taking every chance possible to ensure optimal recovery, your trading routine, and your lifestyle need to synergistically work together. If one becomes suboptimal, the other will soon follow. 

So this is all to say that after losing my Funded Trading Plus challenge, I realized it was time to make a change. My trading approach did not work with my life.

Thus, taking a hard look at my geographical location, my health symptoms, my inconsistency with following scalping rules under stress and lack of sleep, I decided that it was time to shift my trading style.

It was time for me to move to higher time frames and find a time of day to trade that wouldn’t impact my sleep.

What I’m Leaving Behind: Scalping

Even though it’s commonly encouraged for beginners to avoid scalping and start with longer-term time frames, I believe there were a few benefits to taking the contrary route. 

• Lower time frames don’t require an understanding of fundamental analysis – learning how markets move and the kinds of data that impacts them is a heady task. Being able to focus on technical analysis helps prevent information overload when first starting out
• Scalping requires you to create a trading routine – You need to show up every day to evaluate setups. This helps you create a trading routine that comes with quick feedback. If you are organized about scalping, you should be getting into the habit of writing up a trading journal nearly every day. This immediate data and practice is useful and will help you grow more quickly as you reflect on the role your emotions play in your trading.
• You can get plenty of practice in a short amount of time. Each session is an opportunity to work on your discipline.
• You can focus on the movement of the charts during the session. You’ll get more exposure in a shorter amount of time compared to waiting another day to evaluate the next candle. 

While the chances of failure during your first and probably second years of scalping are nearly 100% (Sorry, I just want to be honest with you!), the experience you gain is priceless. 

I believe you learn far more from your trading mistakes than you do your successes. Sure, you will need to invest in trading income as partitioned between different trading courses, mentors, or other learning resources, but another form of tuition is paid through your losses as you gain experience. 

This type of trading tuition is mandatory, there is no avoiding it.

Even if you demo trade (which is highly encouraged!), you will still need to learn how to manage your decisions and emotions when your own money is on the line. Demo trading helps minimize the costs, but it cannot teach you the lesson that comes with feeling the pain of irresponsible losses.

So instead of trying to avoid the storm, sometimes I think it’s appropriate to head right into it and prepare yourself to focus on learning from the experience. Just be sure to do enough prep to avoid killing your account over it.

In this way, I have no regrets about learning how to scalp the markets first. It eventually helped me pass time-sensitive prop firm challenges and make money. The strategies I developed from learning to scalp have made money for my students, as well (many of which are lucky enough to live somewhere that allows them to do so at a preferable time!)

I believe scalping can be a worthwhile, although tricky endeavor. Nonetheless, at this time such a style is no longer appropriate for my lifestyle and trading goals. 

What I’m Moving Towards: Day/Swing Trading the Daily Charts

During the last couple of weeks, I’ve started researching different ways to trade the Daily chart. I’ve bought a couple of courses that focus on using the higher time frames to minimize the time spent in front of the charts while focusing on high probability setups. 

I decided that a 4H or daily chart would be my best option because the NY markets close at 2:00pm PST, in my location. I use charts that follow the NY close on the daily chart, which lets me use the most recently closed candle in my analysis.

This is an optimal time for me to trade because no matter how late I get to bed or how late I sleep in, I’m almost always awake at 2:00pm. 

Another benefit of moving to a daily chart is that there is no rush to take a trade. I have enough time to evaluate the technicals, look at the fundamentals, and pinpoint whether I want to set a limit order or act on the recently closed candle. This dramatically lowers the stress that comes with risking money on a trade. 

I also suffer from pretty severe brain fog, with my thoughts stopping and starting like an Autopia car at Disneyland. When using the daily charts, I can type out my trading ideas and better organize my thoughts about my strategy before taking the trade.

But most importantly, this approach drastically reduces my time in front of the charts. I was in the routine of spending upwards of 3.5 to 4 hours a day with scalping. 

I think it’s pretty common for traders at the 3+ year level to seek to spend less time trading. Trading can be exhausting when done too often and it can feel boring when done right. Taking on longer-term charts usually means less time in front of the screens. This means you can have more time to focus on more important areas in your life and reduce the pressure to act quickly.

Now that I’m focusing on daily candles, I can analyze and set (and forget) multiple trades in under an hour. This is huge – so much time is freed up to better take care of myself and meet the demands of all my other responsibilities. 

My initial impression?

I wish I made the shift sooner! This feels so much more appropriate for my health and living situation than waking up before the sun and grinding out quick trades. 

For a long time I believed the only way to pass a challenge would be through scalping or watching the charts all day. I thought it would be a waste of my experience (and a hit to my profitability) to attempt to learn a whole new approach. 

So too, I was afraid of using discretionary analysis. I didn’t trust myself to learn how to use multiple analysis tools to decide on an optimal setup. I feared that many tools, like trendlines and candlestick patterns can lean subjective. There are so many options that I didn’t know what to choose. I thought I had to be available for every movement. I thought the daily charts only held opportunities for long-term swing trades – some that wouldn’t complete in time for, say, a prop firm challenge or monthly account withdrawal.

Long-time trading professional and educator, Dr. Van Thorpe, always says, “You don’t trade the markets. You trade YOUR BELIEFS about the markets.”

My own beliefs about what I was capable of and what was possible held me back from trying an approach that is utilized by professional traders and investment firms.

And my first week of putting money on the line with a daily chart strategy resulted in a 1.3% profit! Not bad after nearly five weeks of continuous losses!

If only I could have let go of my fears and trusted the process, accepted that my condition and my lifestyle may not be appropriate for scalping, I may have been able to better prepare myself BEFORE taking my Funded Trading Plus challenge.

However, there’s always another trade – as long as I continue to succeed in my demo trading and small account trading with the Daily charts, I can attempt this challenge again in the coming months. 

I share this all with you to remind you that you have options. If you are continuing to face drawdowns each month, perhaps it’s time to evaluate your situation and determine whether you’re trading with a style that fits snuggly in your life and accommodates your trading experience. Whether that means going up or down a couple of time frames, or moving away or towards discretionary strategies, sometimes making a big shift is the answer. 

No one is going to be able to tell you what works best for you. You’ll have to learn what approaches are profitable and select those that match your personality and availability. Luckily, there are multiple roads to Rome – many strategies and styles of trading will get you to your profit goals. Keep your mind open and always stay reflective!