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|Learn Forex Trading > Day 10 Class ( Multiple Time Frames ) > Which Time Frame Should I Trade?|
|Which Time Frame Should I Trade?|
You can trade the foreign exchange using many different timeframes. Some
of the most popular ones are the 1 minute, 5 minute, 15 minute, 1 hour, 4
hour, 1 day, 1 week, and 1 month charts. So many choices can really
confuse the novice trader, so in this article, we will talk about which
one is right for you.|
The one you choose will largely depend on your personality and trading
goals. If you want to be in and out of trades quickly, then you might use
a 1 or 5 minute chart. If you want more time to analyze your trades, then
you will use a 1 hour or higher.
What is the best time frame in Forex? What is the most profitable time frame in Forex?
Those and similar questions are rising day after day in minds of novice
Letís take the most preferred Forex time frames: 1 day, 1 hour and 5 minute.
These time frames are also perfect for beginners to test their feel
about the Forex market.
What time frame to trade? It will depend on your next expectations:
Are you willing to monitor charts every 5 minutes for several hours a
If yes, try trading 5 minutes charts.
Or may be you prefer a slower pace at 1 bar per hour. You also believe
that hourly charts are more reliable in the way they depict the market
since much of the noise produced on smaller time frames can be eliminated.
Or it might be the case that you donít have time watching the charts during the day because you have a full time job and/or you believe that intraday changes do not have much effect on the market and summary results can be best observed by the end of the day. You may also find out that you want to hold your trading positions open overnight, means that your money will work even when you sleep; and at the same time you want to be confident that your Forex analysis wasnít based on short term momentum.` Then daily charts would be just right for you.
The smaller the time frame the smaller the profit goals set by traders for each trade. E.g. while on 5 minute charts Forex traders would see reasonable targets at the next support/resistance level 15-30 pips away from the entry point, on the daily time frame profit goals will be extended several days into the future with expectations of banking 200-400 or more pips in one trade. A trader can make same 200-400 pips trading 5 min time frame, but it would require a lot of trades to be taken, hours of price monitoring, which is not an easy task.
Money management and tolerance for losses
Forex trading is not always about wins, losses are part of the trading
process. Managing losses on 5 min time frame would be the easiest thing to
do. Firstly, because a trader is able to monitor charts all the time,
secondly, because losses are usually small due to the nature of 5 minute
trading: price ranges are smaller and it is easy to tell when the market
starts turning against your position.
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