The time frame is the amount of time available for forex traders to trade in the forex market. This can also be defined as the total amount of time a trader is willing to spend in studying the forex charts in a single day. It will interest you to know that reaching a final decision on the best time frame to use is as old as forex charts themselves and this has been a major challenge for forex traders.. For the traders, they are constantly looking for any edge they can leverage on in order to explore the different charting options available to them.
Whether you decide to choose a 5 minute, hourly, weekly or even monthly time frames for your forex charts, the major aim of your time frame is to be able to make maximum profit at the end of the trading season. Before we continue with this article, it is very important to always remember that choosing the best time frame for forex charts lies generally in your interest as an individual.
HOW TO CHOOSE THE BEST TIME FRAME FOR FOREX CHARTS
In order to choose the best time frame for forex charts, the trader should put the following into consideration.
1. TIME AVAILABLE FOR THE STUDY
In choosing the best time frame for forex charts, the most important factor to be considered should be your time schedule. Your study of the forex charts should be planned around the time you have at your disposal. While studying the forex charts for a very long time frame can give the trader more insight into the market, it is important that the traders study the forex charts using time frames that are convenient for them and the business.
To choose the best time frame for forex charts, take a careful look at your schedule and decide the total amount of time you can allot to studying the charts. These time frames, depending on your schedule could be between 5 minutes to days.
2. SIZE OF THE CHARTS
Apart from your schedule, the next factor to be considered should be the size of the chart to be generated in the time frame. While a 5 minute chart can show the trader what is happening in the market, the larger charts generated in hours or days can give the trader more information on how the market is moving and the possible trend at the time of study.
3. TYPE OF TIME FRAME TO BE ANALYZED
Sometimes, the forex traders may want to use a multiple time-frame analysis to study the market. In this case, the traders will use more than one time frame on a single currency pair in order to analyzed and categorize the outcomes into short, medium and long term behavior in the market.
The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteForex. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC.