Telling new traders to be patient and disciplined by only looking at charts a couple times per day makes trading seem a lot less glamorous. There are many ways you can trade the market. Many people trade with short-term strategy and many people like to go with plans that give them a long time to keep their trades open. There are many time frames in a forex chart that you can use to analyze the trend. One of the reasons newbie forex traders don’t do as well as they should is because they’re usually trading the wrong time frame for their personality.
The time-frame indicates the type of trading that is appropriate for your temperament. Trading off a five-minute chart suggests that you are more comfortable taking a position without exposure to overnight risk. On the other hand, choosing weekly charts indicates a comfort with overnight risk and a willingness to see some days go contrary to your position. In addition, decide if you have the time and willingness to sit in front of a screen all day or if you would prefer to do your research over the weekend and then make a trading decision for the week ahead based on your analysis.
Many new traders spend days, weeks, or even months trying every possible time frame in an attempt to find the one that makes their trading profitable. They try everything from 30-second charts up to monthly charts and then try all of the non-time-based time frames, and when none of them make a profit, they blame an incorrect time frame. When they still don't find a profitable time frame, they adjust their trading system or technique slightly, and then they try all of the time frames again, and so on. The thinking behind this method of choosing a chart time frame is that each trading system or technique has a single time frame that it will work at, and/or that each market has a single time frame that best suits the market's personality.
Most of the experienced traders use multiple time frames so that they get enough time to read charts and develop a powerful trading strategy. This time-frame proves useful for all types of traders like momentum trader, breakout trader and risk trader. Multiple time frames in forex monitor across different time frames to offer a better idea about the forex market movement. You can choose to take various options as per your requirement, but it is best to choose the option of a longer forex time frame. So, whenever, you are asked to choose a time frame for practicing trading in the forex market, always prefer longer forex time frames as this will give you better results and enough time to frame strategy in the forex market.
After a trader has gained comfort on the longer-term chart they can then look to move slightly shorter in their approach and desired holding times. This can introduce more variability into the trader’s approach, so risk and money management should absolutely be addressed before moving down to shorter time frames. For this approach, the daily chart is often used for determining trends or general market direction; and the four-hour chart is used for entering trades and placing positions.
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