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Using the Proper Time FrameI often get asked about time frames for trading the Forex market so I thought we should review them this week. How Do You Trade?This is the big question you will have to answer before you can determine which periods to monitor.If you are scalping or jumping in and out of the market all day, you will use a certain set of time periods, or if you check the charts at night and only enter trades every few days, you should watch a different set of charts. Use Confirming SignalsThe key concept here is you should check the price action of at least 3 different time periods before making your trade.These periods should differ by a factor of four to five. For example... If you are jumping in and out of the market and trading off the 5 minute chart, you should be confirming the action also on the 25 or 30 minute chart, as well as the 2 hour chart. If you are day trading from the 15 minute chart, you should also be consulting the 1 hour and 4 hour charts. If you trade only at the end of the day, you should also be watching the weekly and monthly charts. Higher Frames Carry More WeightGenerally, a longer time period will be more reliable than a shorter one. If you are using trend lines, moving averages, Fibonacci or any other indicators, the levels from the longer periods will be more significant.If you are not consulting the longer term charts, you are trading with tunnel vision and might be missing the big picture. Wishing you trading success,
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