Forex time frames
Choosing Forex time frames
Forex time frames is like your identity. Day, hour, 15-minute? Can not decide, or use several gaps? Or are you not bothering at all? Let’s see what the value of the it is, and how the quality of trading depends on its choice.
(Given example of Metatrader 4)
Trading as Life consists of timeframes
You need to understand that the timeframe is what makes us group quotes, this is the time that determines the size of the bar (or candle). It is also a method of chart scaling, like a magnifying lens that allows you to consider the details of the instrument path change.
It’s like in life. “What have I done in a year?” During the summer? For yesterday? “.
It is easy to use. If you want to see the movement of the instrument in the last few years – you choose a yearlong; for a month – choose a week; for today – you take 30-, 15-, 5-, and 1-minute timeframes.
Choose timeframes based on your comfortability on this timescale. To abstract from money and free time, find your best pace. Then you can agree on it with your deposit and working schedule. Pay attention that for trading on an hour and minutes timeframes, you will have to sit for hours at the terminal.
The shorter, the more accurate
The advantage of working on short timeframes is the ability to find more entry points and therefore make more deals. On long timeframes, the number of possible deals (entry points) will decrease, but the signal strength will increase a lot. It means that one profitable deal made on a monthly timeframe will cover the profit of several transactions done in a week timeframe. An analysis prepared in 15-, 5-, 1-minute timeframe is even more accurate and allows you to place a large number of strong levels.
It’s like a jeweller’s tool or a surgeon. The smaller working surface, the more accurate the operation can be.
Day trader to begin the analysis takes graph with day timeframe. Calculating the size of Average True Range (ATR indicator), you can determine the local and global trends, – the position of the price relative to the levels, and the general direction of the price. When it is determined, we continue analysis of the graph, and we are moving from day to hour or minute period.
Of course, it’s far from the fact that your levels calculated on the day will coincide with the short-frame levels. But if it happened – this is a sure sign of a strong signal. After all, such confirmation of the price indicates a very high accuracy.