A bit hard title if you ask me, but it has to be, to convey my thoughts about trading on shot-term fluctuations and with short-term charts. I will try to explain you this through 3 arguments you are free to trash later if you want. But, the fact is that most of the better traders avoid short-term trading, and they know what they are doing. Short-term trading is more like binary options trading ( for more info search for 24option review online ), because both of these resemble gambling more than they resemble trading.
When a price of the currency pairs starts to move in one direction, and it keeps going for some time, there is a small chance it will turn around easily. Strong currency pairs move slowly, but when they start to move, their trend get a lot of momentum. And they end to keep on going one way due to that momentum, making trades placed against it unprofitable. When you follow short-term fluctuations of those trends you can be decided by them. Momentum lessens and at some points it can seem that price movement might change direction in which it is going, but it doesn’t. It just slows down a bit and then starts again in the same direction. If you observe things through long-term charts you would not get excited over those things, and you wouldn’t be tempted to trade counter-trend.
Investing in large number of short-term trades is as bad as throwing money away. Trading should be done only when you spot strong signal. And if you trade with long-term trends using daily charts, you will be to spot those signals easily. They are obvious on daily charts. But those signals can’t be seen on the shot-term charts. There is a lot of market noise on them, and if you want to trade that way you will have to risk by placing your money on trades found with weak signals.
Another issue with short-term trades is that you have to have a lot of them going. And on forex profit is made by saving your money for right signals and right trades. And that can’t be done through short-term trading. And short-term trading can’t be incorporated in any strategy, and we all know that good strategies bring profit.
Long-term has always, and it will in the future, dictate short-term. So, I ask you, why would you trade short-term, with large amount of noise and clutter when you can trade long-term? When a price start moving in one direction, and that trend sees constant, it will be like that for some time. Whether you trade on short-term or long-term, the trend will go on in one direction. So, by trading short-term in this case you are only risking more money,due to lack of good signals. Even if counter-trend happens, there isn’t a lot of profit to gain from that, and you never know how long it will last. Take your eyes off of that trade, and your trade can cost you a lot.