Analyzing Time Frames to Use in Forex Trading

In currency trading there are many different time frames you can use. There are charts in all Forex charting platforms varying from 1 minute up to weekly or even monthly. What you have to see is what is the best time frame to analyze the currency pair you work with. The most common ones that can be used for day trading are the 1, 5 15 and even 30 minutes time frame but watch out and be careful with your choices.

What the best time frame a Forex trader can use:

1-min is not very good. In Forex you'll always pay a 3 or 5 pips spread and most of the times the 1 minute period don't give you many opportunities. It is too small to avoid all the noise and won't be enough for you to find good intraday trends.

3-min is not much different. If you use this chart it will be hard for you to see any differences between a small price swing and a big one.

5-min is a fairly decent time frame to day trade Forex. It allows you to find the fast trades with a good movement in order to pay for the spread and still make profit for you as well.

15-min is just like the 5 minutes one and it is one of the best time frames for a day trader. This time frame you can also hold your winners for much longer than the 5 minutes one, so it's a good choice for day traders.

30-min can only be used if you intend to hold a trade for up to 6 or 8 hours, nevertheless, it can also be used for day trading Forex.

Talking about the short-term traders, they prefer the 1-hour chart, the 2-hours chart, the 4-hours chart and also the daily chart.

1-hour chart is the right one when you want to hold a trade for 1-2 days. It has great opportunities for this kind of traders and also allows you to trade with good risk-rewards (this is almost impossible to do in time frames such as the 5 minutes chart or below).

2-hours chart and 4-hour chart are the best options to the ones that want to hold a trade for some time up to 2 weeks.

Daily chart is used by traders that hold trades for weeks or for investors.

In Forex there are many choices of time frames available. It really depends on the kind of trader you are. Bear in mind that if you are going to use technical analysis in your trading, you will need larger time frames, so it is important to know what you want and strategically choose the chart in order to help you achieve your goals.

More articles:
How to Calculate Profits. Compare Forex Brokers. Analyzing Time Frames. What is required to trade Forex successfully? Choosing the Right Forex Trading Strategy. The Advantage of Using A Forex Signals. How Stop-Losses Work. Day Trading Strategies For Beginners. Using Forex Trading Signals. Finding a Good Forex Broker. Forex Trading Basics. Using a Managed Forex Account. Forex Market Advantages. Using Forex Charting Software. Using Forex Indicators. Using Forex Trading Alerts. Forex Forecasting Strategies. How to Read Forex Charts. Forex Swing Trading Methods. Learn Forex in Six Steps. Automated Forex Trading.