Most Forex traders have no idea how and why Forex prices move and make key mistakes in the way time frames trade. In this article, we will look at three popular time frames and see what is the best time frame to trade in your trading strategy.
In Forex markets, all the basic news about supply and demand will be displayed in the price action, and therefore the views of all traders, so let’s divide the price action into 3 time frames.
Major currency trends that last from a few weeks to many months and reflect the economic and political health of the country’s currency. These big bases are slowly changing from expansion to contraction and that is why these trends have been going on for so long.
While big fundamentals prevail in the long run, in the short term the emotions of traders can jump prices to much higher or lower, and this can be seen in medium trends, within a large trend that can be either with the main trend or opposite. Typically, these trends will last from a few days to about a week.
This is an action within a day and is not really a trend at all, just a random price action. In one day prices can go anywhere and go.
What is the best time frame for trade?
From the above, it is clear that trading long-term trends can give you the largest amount of profit with the least business. All you have to do is enter the trend and keep it – but long-term trend tracking really suits a trader who is patient and disciplined.
Trading medium-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 depend on your personality.
I haven’t mentioned daily trading yet and it’s the most popular time frame for trading, but it doesn’t offer you a real chance of success. There is a large industry that sells waste robots and other so-called low-risk daily trading and scalping strategies, but they do not make money and daily traders lose.
If you want to win in Forex trading, do not make the mistake that most people make and trade in the short term – trade in the long run and you will have chances on your side and you will be able to make a great second income.