The best time frame for forex trading all depends on the kind of trader you want to be.
Actually , all time frames are good to trade as this depends on the trader’s strategy and style.
The table below summarizes the different time frames and will guide you to choose the appropriate timeframe that suits your personality.
Time frames and the types of traders
We the traders have different personalities and reasons why we get to the market to trade.
You may find it comfortable to sit in front of your computer all day to get all available opportunities.
I may not even sit there for an hour. Very interesting, right? Why? Because it’s not in me to do that.
This simply means the time frame you trade on suits you well but not for me.
When you know the kind of personality you have, match it with the kind of a trader you want to be.
Then you can determine the best time frame for forex trading that suits you.
Let’s us loo at these timeframes once more
Shorter time frame
On shorter time frame price moves very fast.
Trades close in a short time there fore you don’t take long to realize profits/losses and you are exposed to a lot of trade signals.
You can trade either as a scalper or a daily trader.
If you choose to scalp, trades last for very short time. The 1 -15 minute chart time frame works better for you.
If you want to be a short term trader without scalping and want to do as many trades as possible, you can do 15-30 minute charts.
The medium time frame
When you trade on this, you are mainly a day trader. Here you trade on M30 time frame, H1 time frame or H4.
This gives you enough time to analyse the market.
When you have taken a trade, you don’t have to sit in front of the computer to watch each and every price movement.
However you have to monitor your trades once in a while. Price does not move as fast as on the lower time frame.
Those who can’t sit on a computer for a long time but want to trade daily, choose to do H1 and H4 time frame charts.
When trading on medium time frame, mostly close trades at the end of the trading period.
Larger time frame
On a larger time frame, you analyse the market at a larger perspective.
Price movement is slow and trades take long time to mature.
If you like to take things slow or perhaps you have a tight work schedule, this is for you. Daily(D1) weekly(W1) or Monthly(MN) time frame charts will do good for you.
Choosing the best time frame for forex trading also depends on the size of your account
The amount of capital on your account should be enough to keep you in a trade in relation to the choice of the timeframe you use.
Short term trades can take advantage of leverage since they are in a trade for a short time.
The long term traders need a lot of capital to cover volatile movements and to sustain the open trades for the selected time.
All in all, any kind of time frame you choose to use should fit your personality.
Take your time practicing on a demo account and try out different time frame.
That way you will know the exact time frame that matches your personality.
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