What Is The Best Time Frame To Trade?

Time Frame to Trade
 

The time frame you choose to trade will be one of the greatest contributions to your success or failure as a trader. One of the biggest mistakes aspiring traders make is simply over trading. Through trading smaller positions and larger time frames you can achieve enormous success.

You want to pick a time frame that is going to fit your personality and lifestyle. Do you work full time? Do you have a family? If you had all the free time in the world how much time would you still want to devote to being in front of the computer screen? Brainstorm for a moment. Spend the day thinking about what is your ideal schedule.

Time Frames to Choose From for Forex Traders

§  Daily time frame = 1 signal period a day

§  8 hour time frame = 3 signal periods a day

§  4 hour time frame = 6 signals periods a day

§  1 hour time frame = scalps in fast moving markets

The reason I specified ”for forex traders” is because the higher time frames happen to be much more profitable in forex trading than for example e-mini which can be trades on the 1 & 3 minutes charts.

Advantages of Each Time Frame

Let’s begin with the daily time frame which is ideal for those who busy with work and family that they only have very limited time to spend on the markets each day. You are looking for “once a day” trading style. You can spend ten minutes or so scanning the markets for new trade setups and looking over the charts and five to ten minutes placing trade orders.

The next two time frames I consider the best for trading forex. I will cover them together. The 8 hour time frame is my personal favorite as it bridges a gap between the daily and 4 hour time frame that provides to be an excellent filter against normal market chop or price fluctuations that the 4 hour tends to get caught up in while providing more opportunity to stay with current market momentum than the daily time frame does.

That being said, the 4 hour time frame is excellent for taking pips out of the market when you are picking your setups and see things nicely aligned. If you have the time to watch the charts or happen to catch the market when scanning your charts and see a nice setup on the 4 hour it can provide some nice regular gains.

The 1 hour time frame is ideal for those who are actively trading the market and will be in front of the computer to watch their trades play out. If you choose to trade this time frame you have to be able to distinguish when the market is moving and when it is not. The market tends to be in a range 80% of the time and trend 20% of the time. Understand that means you must be able to see when that 20% of trending market action is taking place and then take short term opportunities on the 1 hour. This is a scalper’s time frame for forex traders.

What time frame are you choosing to trade and why?