Quality vs QuantityThis has been an ongoing battle between generations of traders and we’re here to provide some insight and let you choose between what type of a trader you would like to be.
When it comes to trading, there appears to be a lot of misunderstanding on both sides about the Quality versus Quantity Debate. Because this is such a crucial topic for a trader, we've been meaning to write about it for a while, so now is the moment to dispel some of the misconceptions, misinformation, and misunderstanding. Let’s go ahead with some common arguments:
1) It is less stressful and more accurate to trade greater time periods.
2) Anything less than a one-hour chart is merely noise.
3) Trading smaller time periods leads to excessive trading and analysis.
Statement #1 is 90% true. Usually, it’s easier to observe big economical trends on larger timeframes. You’re pretty much becoming an investor at that point. However, with more risk we usually tend to have more reward. IF executed properly, more trades on a smaller timeframe should yield more pips? Not exactly! The market reality is different. Overall, it’s a good rule of thumb to stay open-minded and capitalize on market moving both directions, but it’s also easy to get caught in this battle. Our advice for newbies here, try to aim for less trades for the same overall reward.
Statement #2 is also kind of true. Except sometimes, it’s a useful noise. One-hour charts and lower are extremely useful for proper entries. On larger timeframes 20-25 pips don’t matter, but over time they add up. Think of it as a casino. They only have 3-4% edge over players, but if you spin the roulette 10.000 times, this difference will be useful. Pay attention to our entries and rank your past trade on a scale of 1-10.
Statement #3 is 50% true. DON’T analyze charts on M15, with all the honesty and not to offend anybody, you have to be a psycho or a genius to see a pattern through all those extreme outliers. If you have that 20/20 vision, good for you, but keep in mind that structures on M15 are completely unreliable, so in the long run, failure is inevitable.
On the chart itself you can see the visual difference between the “Trader A” and “Trade B”. Which one would you like to be yourself?
