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How to pick the best time frame for forex trading

Author: Alfie Davies
by Alfie Davies
Posted: Feb 14, 2017

There many different ways of trading the financial instrument in the world. Trading strategy tends to vary from traders to traders since different people have different opinions and approach. For instance, those who are aggressive traders will generally focus on the smaller time frame in the market and take high-frequency trades in the market. On the contrary, the conservative traders will use the higher time frame in the market to execute high probability trades in the market. But if you look at the successful traders than you will see a close relation between them in terms of trading methodology. Most of the professional traders in the forex market use the multiple time frame analysis since it greatly reduces the false signals in the market. On the contrary, the novice traders always focus on the lower time frame for possible setups in the market. In this article, we will discuss how to pick the best time frame in the market for profitable forex trading.

Use the daily chart and 4-hour timeframe: If you are looking to become professional traders in the forex market then it’s highly imperative that you focus on the higher time frame in the market. All the professional traders in the forex market use the daily chart and the 4 hour time frame to do their technical analysis. The daily chart allows them to identify the long-term prevailing trend in the market. Always remember that in order to make profit consistently you need to trade along with the long term prevailing trend in the market and the best way to find the long term prevailing trend is by using the daily chart. Once you find the long term prevailing trend than switch back to a 4-hour time frame to spot possible trade signals in the market in favor of the long-term trend. But before you do the time frame switching experiment make sure that you use your demo trading account to perform the trade execution. Once you are comfortable in with the time switching technique you can trade the forex market with real money by this system. But in order to get the best trade in the market, we need to take some extra steps to secure our potential profit in the market.

Multiple time frame analysis: Multiple time frame analysis is extremely crucial for the traders. Most of the retail traders in the forex market fails to achieve success in the financial industry since they don’t know how to do the multiple time frame analysis in the market. But in order to make profit consistently from trading, you need to learn the art of multiple time frame analysis in the market. If you look at the professional forex traders than you will see that all of them use multiple time frame analysis techniques to avoid the false signals in the market. It’s true that you will be confused while doing the multiple time frame analysis in the market. So for that reason, you can use your demo trading account to master this art in the financial market. If you are truly committed in achieving success than learning the art of multiple time frame analysis in the market won’t take you long.

So which time frame should we trade?

If you truly want to become professional traders in the forex market then you should always trade the higher time frame in the market. If you look at the scalpers in the forex market then you will notice that they also use different types of pending orders in the market to trade the higher time frame. Trading the lower time frame in the market always generate too many false signals in the market and traders encounter too many losing trades. But in order to remain profitable in the forex market, you need to have a valid trading strategy which is developed based on higher time frame trading. So if you are relatively new in the forex market then you should develop a balanced trading strategy using your demo trading account so that you can learn the art of trading without losing any real money in the market. All the professional traders in the forex market always trade the key support and resistance level in the market in the higher time frame for its extreme level of reliability.

In Summary, Forex trading is all about pin perfect execution of the trading plan. If you are looking to become a professional forex trader then you need to know the best time frame to trade in the market. Don’t trade the smaller time frame in the market since it produces too many false signals for the traders. For consistent profit, you should trade along with the long-term prevailing trend in the market and try to trade the key support and resistance level in the market. And for the better winning edge, you should also focus on multiple time frame analysis.

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Author: Alfie Davies

Alfie Davies

Member since: Jul 13, 2016
Published articles: 3

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