When it comes to time frames, I recommend experimenting. You have to try out different time frames to find what works for you. That said, I use the 5-minute to get into every trade.
The big reason I preach 5-minute candles is because pretty much all the patterns that I teach and trade, I like to see them set up on the 5-minute. I like to see a little bit of a zoomed out time frame to see it set up.
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Table of Contents
The Big Picture
It’s always funny with time frames. People almost treat them like a religion. I talk about 5-minute charts and people get angry.
“No, you’ve got to use 1-minute candles!”
Here’s what I say to them: Just use what you like. If your time frame is a religion, I’m not going to try and change your mind.
Here’s Why I Trade 5-Minute Candles
I like to see all the patterns set up on a five-minute chart. Why? Because I’m trying to avoid false moves. I’m trying to avoid fakeout breakouts. And I think zooming out a little bit helps with that.
There is one thing to clarify here. I use the 2-day, 5-minute candle to get into the trade. That’s my zoomed in timeframe. That’s where I’m placing trades. I like to have yesterday and today. That way I can see what the stock did yesterday, and what’s going on today, zoomed in.
Now, a lot of people, especially newbies, like to use 1-minute candles. I do not recommend that. I think you get faked out way too often. You kind of hallucinate to a certain extent. You see something that isn’t really there.
When to Flip Over to the 1-Minute Chart
After you’re in the trade, you have a little more flexibility.
I do it a lot, and I probably would recommend it: Once you’re in it, zoom in, because you’ve waited for the pattern to set up. You’re in the stock. There is nothing wrong with zooming in at that point.
My Take
I started trading 20 years ago. I’ve made every mistake in the world a thousand times, but I learned from those mistakes. I remember 15 years ago when I recognized that I was zooming in too much. Those 1-minute candles, it was just zoomed in way too much and it was affecting my emotions. Once I switched to 5-minute candles, I got more consistent. I wasn’t panic buying and panic selling all the time.
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Watchlist
When there’s news about communicable diseases, vaccine stocks run. Yesterday, Ebola stocks went crazy.
Virax Biolabs Group Limited (NASDAQ: VRAX) was up 97% at the open:
Source StocksToTrade VRAX 2d-5m vaccine runner
GeoVax Labs Inc. (NASDAQ: GOVX) was up 146% at the open:
Source StocksToTrade GOVX 2d-5m vaccine runner
Finally, the biggest runner yesterday…
Sunshine Biopharma Inc. (NASDAQ: SBFM) was up 547% at the open:
Source StocksToTrade SBFM 2d-5m vaccine runner
Today’s watchlist carries on from yesterday’s Big Picture: a theme can move an entire sector. Themes aren’t always nice. Your job is to trade the pattern. Keep these and other vaccine spikers on your watchlist until this plays out.
On My Radar
- Apple is crushing it on both ends of the laptop market. I just bought a new M5 MacBook Pro with 128GB of RAM
- Read this book, just don’t think it has anything to do with penny stocks: “The Intelligent Investor” by Benjamin Graham.
- I’m a big fan of peptides. That said, make sure you get them from the right place. I only get mine from a US-based compounding pharmacy. Unsure? Read this.
- Check out my new Day Trading for Beginners course. Lesson 7 is about reading charts and candlesticks
- Verdict: Elon Musk 0 – 1 Sam Altman