There are a wide variety of different forex traders who follow different forex trading strategies.
Some of these traders may get in and out of trades within an hour or two, whereas others may stay in a trade for a few weeks or more. Depending on your forex trading strategy and the style of trading you follow, you’ll concentrate on different time frames on the charts you use.
So what’s the best time frame for your style of trading and strategy? Read on to find out…
What is a time frame?
A time frame is the period of time which passes between the opening price and the closing price of a bar or candlestick on a chart.
Using your charting software, you can opt to view different timeframes. These include:
• Five minutes;
• Ten minutes;
• Weekly; and
Particular time frames will suit different traders depending on their forex trading strategy.
Different time frames for different forex trading strategies
Your forex trading strategy will dictate which time frames are better suited to you.
For instance, if you’re a scalper, you’re in and out the market quickly. Five minute time frames could be the perfect option for you.
If you’re a day trader, then honing in on half-hour or hourly charts will likely be the most useful. When trading intraday, you’ll enter and exit your trades on the same day and won’t hold them overnight.
If your forex trading strategy means you take a more medium- to long-term outlook, then time frames from four hourly to weekly will suit your needs. Following this type of strategy could mean holding onto trades for several days, weeks or over a month.
Experiment with different time frames to find the ones to suit your forex trading strategy and your trading style best.
So there you have it. How to pick the best time frames to suit your forex trading strategy.