Skip to main content

Which Time Frame Should You Choose to Trade and Which Is Most Profitable?

Most Forex traders have no idea of how or why Forex prices move and make key errors in the way the time frames they trade. In this article, we will look at three popular time frames and see which is the best time frame to trade in your trading strategy.

In Forex markets, all the fundamentals supply and demand news will be shown in the price action and so to will the views of all the traders, so lets break the price action down into 3 time frames.

Long Term Trends

The big trends in currencies which last for a few weeks to many months and they reflect the economic and political health of the country's currency. These big fundamentals change slowly from expansion to contraction and that's why these trends last so long.

Intermediate Term Trends

While the big fundamentals prevail over the long term, in the shorter term traders emotions can spike prices to far up or down and these can be seen in intermediate trends, within the big trend which can be either with the major trend or opposite to it. Typically, these trends will last a few days to around a week.

The Short Term Trend

This is the action within a day and is really not a trend at all its simply random price action. In a day prices can go anywhere and they do.

Which is the Best Time Frame to Trade?

From the above its clear that trading the long term trends can give you the biggest amount of profit with the least amount of work. All you do is get in on the trend and hold it - but long term trend following, only really suits a trader who is patient and disciplined.

Trading the intermediate term trends can be very profitable and requires less patience and discipline than trading long term trends. You can make money in both time frames and the one you choose, will simply be down to your personality.

I haven't mentioned day trading yet and its the most popular time frame to trade in but it offers you no real chance of success. There is a big industry that sells junk robots and other, so called low risk day trading and scalping strategies but they don't make money and day traders lose.

If you want to win at Forex trading, don't make the mistake the majority do and trade short term - trade longer term and you will have the odds on your side and be able to make a great second income.




Source by Kelly Price

Popular posts from this blog

Commoditizing the world

Let's discuss commodities; With the latest Enron situation, it is important to understand the way things work. A commodity is anything useful, especially a transportable agricultural product or mining product. This comes from the Latin word "commoditas" meaning roughly advantage, convenience. So then what is a commodity? Well we consider Gold, Silver, wheat, corn, pork bellies, coffee, etc all commodities. If you look in the back of the WSJ or Investors Business Daily you will see a listing of all the commodities traded on the commodities exchange. Enron made some errors no doubt, but let's not judge all commodity markets in haste. Commodity trading works best when there is a stable instrument of trade. Sometimes the instrument of trade is actually the commodity. If you looked most countries of the world today you would find that there are three basic instruments of trade; money, as in currency, precious metals and gems, drugs; like cocaine, opium, and

Virtual Currency Games

Every little boy's (and many grown men's) dream of making a living by playing video games is edging closer to reality. The recent release of HunterCoin and the in-development VoidSpace, games which reward players in digital currency rather than virtual princesses or gold stars point towards a future where one's ranking on a scoreboard could be rewarded in dollars, and sterling, euros and yen. The story of the millionaire (virtual) real estate agent... Digital currencies have been slowly gaining in maturity both in terms of their functionality and the financial infrastructure that enables them to be used as a credible alternative to non-virtual fiat currency. Though Bitcoin, the 1st and most well known of the crypto-currencies was created in 2009 there have been forms of virtual currencies used in video games for more than 15 years. 1997's Ultima Online was the first notable attempt to incorporate a large scale virtual economy in a game. Players could collect gold coins

Could This Be a Great & Extreme Reversal?

The EURGBP has been on of the best currency pairs to trade since the referendum. And it looks ready to kick off again... False Break Reversal The FBR is one of the great reversal patterns. They show up time and again but can catch us out because we've been conditioned to stay with the dominant trend. It started last Friday with the Harami, inside day. Monday broke lower following through, so it seemed, with the down trend running since July. By the end of the day, it had reversed, leaving behind a long wick that turned the day's trading into a Hammer, one of the best price action reversal candles. Tuesdays price action confirmed the FBR. The rule is that when price comes back above the high of the downside breakout candle, the FBR is set. Earlier sell trades closed and then reversed. That's exactly what we have done. Hikkake An added technical reversal is the Hikkake. It's formed by at least three candles, starting with the Harami. Following the break lower, recovery on