Which among the multiple time frames is best when trading forex?
Figuring out the best time frame for you is important
Just in case you did not know yet, a single currency pair exists in different time frames. It can exist in highly long, average, or short time frames. For instance, trader 1 looks at a week's worth of the EUR/ USD chart where he sees a downtrend. In another perspective, trader 2 also looks at the EUR/ USD currency pair but in a shorter time frame. He is looking at a one-hour chart where he sees a ranging movement. Which of the two traders have a correct interpretation in this case? Most likely, both of them are correct. However, if they make different trading decisions where one buys and the other sells, who is right among them?
Knowing what's best for you
A single currency pair exists in different and multiple time frames for a reason. As a trader, you must know how to take advantage of this fact. Let us talk about some of the most probable reasons why a trader chooses a specific trading time frame:
- Extremely short time frames. Some traders click on that 1-minute or 5-minute chart, most likely because they want to know more details about a particular currency pair or are clueless about what is happening. Some traders who use this time frame might be beginners who wish to quickly gain the upper hand in trading. But unfortunately, there is no shortcut to success, so they end up disappointed.
- Minute charts. Some traders prefer charts that are short but not extremely short. This chart is for people who are not too patient and want to enter a trade as early as possible. Some traders are comfortable with this chart because they feel like a few minutes is enough to make a trading decision. However, some might beg to argue that this is not enough.
- Hour charts. Hours charts give traders time to think, but not for too long. Traders have time to observe and analyze without having to rush.
and extremely long charts. Some traders prefer looking at
the bigger picture of how a single currency pair behaves. They can never
trade when they know only a few details in a short period. So, they opt to
look at daily, weekly, or even monthly charts.
So, what's the best time frame to use among these?The choices are a lot, and we understand that they can be pretty overwhelming. No one starts as a pro. Even geniuses in their specific fields began as beginners even when they had inborn gifts. The same goes with trading. There is a reason why brokers and trading platforms have a demo and practice account. The only person who can tell the best time frame is you. With a demo account, you can try as many time frames as you want until you realize which one fits your personality. Remember that people's personalities and preferences are different, so it makes sense that your trading style will tell you in time which time frame is the best. Practice makes a lot of difference.