What is a forex time frame?
It is a period of time, in which you will trade, and time of one candle (bar) on the chart. If you’re asking this, it means you don’t have trading experience yet. New currency profiteers should have a clear understanding what are time frames in trading.
List of time frames in forex:
- Daily charts
What time frame should you trade? An experienced trader can use any time frame he likes; as opposed to beginners, experienced traders may choose very short periods as well as long-term trade, as long-term forecasting requires experience.
What’s left for beginners?
Beginners' optimal trade is at large intervals. You may choose any interval, but do not forget about the trend.
- If you compare it at the larger and smaller intervals, the first option is preferable as it is more advantageous to trade in the direction of the main trend. A trader cannot work just a few times a year, therefore, choose an option with both a high trend and many signals indicating possibilities of earning an income.
- The most simple trading takes place at the large intervals, because the trend is more stable and interference will be imperceptible for a trader. Approximate profit will be minimum 200 points at one transaction, and the stop loss won’t exceed 100 points.
- A trader can avoid getting the jitters waiting in front of the monitor; he can look into it a few times a day to decide what’s preferable: trade today or not?
- Retry of the market is a consistent pattern; the interval size chosen by the trader will influence the frequency of the signals’ repetition. To stay on profit, you better choose midterm and long-term strategies. In case M5 is chosen, probability of the strategy failure after a minor change on the market is extremely high. Speaking about a big interval, strategy work term increases, because the market is not easy to change.
- The advantage of the day intervals is that the trader observes the same situation for a long time, and same is seen by the other profiteers. Thus, the most important pivot points have already been calculated by them, so you can take the same position as most traders. With smaller intervals regular changes on the market are inevitable, hence the increase of chances that trader misses the signals, wouldn’t notice something or underestimates the circumstances. Such trading causes big losses.
- Deciding which time frame to choose for trading, keep in mind that bigger interval signals have higher priority. If you think you have perfect signals on small intervals, the reversal of the market can be very swift.
As for the stop losses, they can be reduced by reducing the volume of operated transactions. This is possible, if, when opening a forex account, a trader gives preference to a micro account, and best is that he decides for a cent account. In such case, the deposit figure is increased by double zero, whereas a lot amount is decreased a hundred times. This gives an opportunity of trading on the big intervals without a crash risk. Thus, a newbie can sharpen their skills and learn to trade.
At present almost all the brokers and the dealing centers offer opening such an account; to determine, which forex company to choose, you can refer to a forex brokers rating. A rating is composed by both professional analytics who take all the aspects of a company’s activities into consideration as well as regular traders who evaluate quality of support and services offered to them.