help on M1-M5 dilemma

[naqviimran]

Hi AIMS Masters:

Need some more help to understand M1-M5 dilemma, which I often face when M5 is in the middle of wave 3 showing several peaks and darker tones and M1 shows setup 1. What to do in that case? Pls pardon my incompetence. Have attached the charts.

[Tomi]

To my eyes M5 AO is peaking and retracing which means that on M1 there might be nice opportunities. On M1 AO there's W3 and W4 already printed. So, possible W5 starting on M1. Looks good to me at this glance.

But whooa dude. What are you trading on M1.. Is there enough movement? Check that spread is not too big proportionally to general movement. As a rule of thumb is that there must be at least 70 pips average daily movement (much more is much better) in order to trade the instrument on M1. Not saying it's not doable, but please check the conditions. M1 requires moves and low spread.

[naqviimran]

Thanks for your inputs, Tomi.

As a second opinion (cannot be an opinion but only an observation, since I am learning), I feel that the guiding factor here could be the divergence on internal waves of the third wave. It was absent; there was no divergence on the internal waves of the ongoing third wave, which hinted that there were high chances that the price would go up, and it did. See the attached chart.

P.S - Yes, Tomi, there is enough volume, since I mostly trade stocks very liquid stocks with high volume and momentum. There are very elastic and give the right feel to trade them.

[acceleratum]

well im learning too adn i keep it simple:
If theres no divergence and enough room till tz1 Ill take it long.
If tz1 is hit already or divergence shows up the longs are exhausted and its gonna come short most likely unless theres new information coming (news events).

[immy]

I thought I won't ask but can't resist to do so. Why do you chose to trade the Stock Market? What edge does it give you? Is it more volatile and more profitable than forex market? Does it provide better liquidity? does it provide smaller commission/spread charges? Is it substantially better than lets say simply trading Eur/Usd?

thanks for your reply in anticipation

[naqviimran]

Nothing like an edge. Just the timings that suit. Indian markets open at 9.15 a.m IST and close at 3.30 p.m IST, just when the Frankurt has opened and London is about 30 minutes away. Moreover, I do not know a proper broker in India, who would provide good services for forex trades like I get for Indian stocks.

[immy]

Nothing like an edge. Just the timings that suit. Indian markets open at 9.15 a.m IST and close at 3.30 p.m IST, just when the Frankurt has opened and London is about 30 minutes away. Moreover, I do not know a proper broker in India, who would provide good services for forex trades like I get for Indian stocks.

Further to my pm reply, the trick is to understand that trading is a business like any other but this is a business that requires a specific, simple (simple but not easy) skill. A business will always fail without a proper trading plan, and a skill will never be learnt without a "structured" learning process.

It is for this reason, I have laid out those 3 steps in the hunt section which you seem to have ignored. If you trade for MAKING BIG HUGE amounts of money. Chances are you will FAIL. There are two ways, go through the fire and come out as "pure gold" or follow the step by step plan.

which one would you go for?