Time Frames determine how much time is in every candlestick in your chart. If you are on 4 hour time frame – every candlestick will represent 4 hours time period. If you are on 15 minutes time frame chart – every candle will represent 15 minutes of price action.
Time frame you are using will determine your trading frequency. Higher the time frame – less trading opportunities.
What Time Frame to Use in ForEx Trading?
If you are trading multiple times a day and closing your positions at the end of the day – you will be probably using 15 minute charts
You trade few times a week, swing trader – 15 min to 1 hour charts
If you are long term trader – you will use 1 hour charts and above (Recommended)
No matter what, always trade with the bigger trend. For example, you have identified downtrend on your main chart, 1 Hour chart. Next you will do is to check higher time frame chart – 4 hour time chart. If you have identified uptrend on 4 hours chart – you will consider only buy signals as valid on your main chart (1 Hour).
Picture: Select your time frame then open larger time frame to see how overall trend looks there. When you go back to your time frame you will consider only entry signals that correlate with direction of higher time frame trend.
Another example. You are trading 4 hr chart and see uptrend on Daily chart – you won’t be entering the market on short signals, but you will wait for your long signal that correlates with the main trend’s direction.
What is the Best Use for Time Frames?
Use Time Frames to Pin Point Your Entry
To do this you will now zoom in on smaller time frame to get your precise entry signals.
For example, you are trading on 4 hour time chart and you got your reversal signal. You will be zooming at 1 hour time chart, doing your Technical Analysis there and looking for exact entry point for your trade.
Use Time Frames to Define Your Exit Point
When trend-trading and with the trend just developing it might be hard to define our exit point within our main time frame. What you should be doing is go to higher time frame to identify main support/resistance levels which will help you identify your exits.
Use your main time frame to get your main signals. Higher time frame to identify exits, lower frame to pin-point your entries. Considering lower/higher time frames will help you avoid many false signals. Practice finding your market entry/exit points.
ForEx Chart Time Frames PDF Download
Use this Chart Time Frames PDF document to improve your understanding of ForEx market and to improve your overall trading skills. Feel free to share it with your friends and associates. Happy trading!