Sometimes I think that the trading Forex is more profitable when a trader opens trades on smaller time frames. Let’s say, 1H and 15M charts as seen on the world wide web. It seems swing trading is not possible when it comes to currency and indices as the movements are faster than future contracts and commodities.
On the other side, it looks like Futures, Stocks, and Options trading bring better profits when traders use higher time frames let it be a 4H, daily, or weekly chart.
At what extent do you agree or do not agree at all?
Personally, I think the question of which TF is most profitable depends on both the markets and the trader.
When markets are trending for a long period then the longer TF will normally be more profitable. But trend trading off, say, daily charts will suffer when markets are ranging, consolidating or just simply drifting along.
But trading short term charts like 15m profitably is not easy to do consistently over time. In my opinion, the 1-hour is about the lowest that can produce sufficient moves to be consistently profitable. But it really depends on what kind of trading is being carried out and whether the trader is capable of trading it with sufficient discipline to know when to trade and when not to trade. Great accuracy and timing is needed with entries and exits on these short-term timeframes.
I am not sure what you mean by swing trading being impossible in forex and indices because they are too fast. I think swing trading is perfectly possible with both. And commodities like Crude Oil is just as capable of fast moves as indices.
When you talk of futures, are you referring to just commodity futures? Forex futures move in line with spot forex so I don’t see the difference in their speed of movement?
I would suggest that generally speaking, profiting from individual stocks and shares is a longer term process. But futures trade the same as their underlying commodity, be it forex, interest rates or commodities.
Options are a very different instrument and can be tailored to match the trading style that the trader is seeking. Two different features with options are 1) the choice of the strike price and whether it is in the money or not, and 2) the time decay element. Option prices are built around both of these aspects and having a position composed of both calls and puts and/or short/long positions in either/both and with different strike prices can create some very complex scenarios to suit specific trading objectives and scenarios.
So my answer, really, is that it is “horses for courses”. You need to know what objectives and trading perspective you are seeking and then match the trading method and time-frames that best suit it.
I don’t trade futures or options but for stocks I use 1D/1W. I do the same for forex because I can’t look at charts all day. I agree with @SovoS that all of this depends on the type of trader you are. I’m a newbie and also do this when I have free time which is why longer time frames work for me best.
I don’t think your profit somehow depends on what timeframe do you use, maybe these are your personal notions, however for me there are no differencies whether I trade M1-M5 or H1-H4 or W an M, so every trader has its own trading style you know and what timeframe does one trade then it’s the most profitable for him/her.
Basically, there can be some differencies between the instruments which you trade like future, options or others, but it also suits for trader variatively. I believe that forex is better traded in D1-W and options are better traded in M1. It’s up to every trader and it varies a lot.
I do think that timeframe is so an individual thing. It depends on both the market and the trader. In most cases traders choose timeframe according to their interests, whether they choose day or swing trading. Here I guess we have to pay attention to trend. Most of novices and beginners choose the only one TF and work only with it, while trend must be their reference point. Otherwise, there are some points of view which sound like " you aren’t able to focus on several TFs, choose the short one, because trend is always on its side ". But in my opinion, you have to trade as you get used to and maybe later when you gain experience you can choose another TF.
All time frame Work same to me. I don’t know about your observations. But trading blindly on the 1he chart or 15 min chart could be risky because you are not seeing the bigger picture. But i still believe the higher time frames bring out the best results
You do it wisely I guess. The choice of trading style is individual you know, options/futures and stocks be better traded in long-term, because due to fundamental analysis it will be much more easire to foresee the price movement. So, just look at the economical news and build a strategy for these instruments. As you said, looking at charts all day is more appropriate for currency pairs and forex traders, that’s right, because here we can use technical analysis which suit forex trading with 1/5/10/15 minutes or 1/2/3 hours as we talk about time frames, you just catch the trend and then make money. However it’s not easy as it might seem I believe.
The price action movements in lower time frames are fast which makes it riskier to trade. Although it can ensure a large number of trades, these fast paced price movements can cause you to react emotionally. Lower time frames are not advisable for beginners or even part-time traders.
In my opinion, it’s kinda difficult to change time frames, because all of the time frames have their own peculiarities, which should be known by traders. As a rule, traders pick only one time frame, which is the most suitable for them and this time frame serves as the main for getting profits actually. Nevertheless, there is such a practice of changing time frames and moreover you can trade different time frames at the same time, for example you can be fond of intraday trading, but at the same time you can invest money for months/years. This thing is good but can be a bit confusing for traders.
Well, of course you can use various time frames and trade at the same time on several time frames, nevertheless it may take lots of time for you to trade successfully. Every trader knows that the main objective of trading activity is success. So, we have to dedicate enough time in order to learn how to trade intraday and investing for example, or intraday and scalping. So, this option is not for rookies actually, because they have no skills, knowledge and experience in order to conduct such trading activity. As for professionals, then I tihnk they can try to trade this way, however they will understand how is it difficult even for them.
It does not matter which timeframe you use to ENTER your trades. This is what defines you as a day trader, swing trader, etc. However you need to have a top down view of the market to understand where you are. This is the best approach.
If you are lazy, pick a higher timeframe for the view and combine it with a lower timeframe for entries. However being lazy will only bring you so far.
Your trading strategy should be the factor that decides which timeframe you will monitor and enter your trade so it is not necessarily more profitable to trade forex in a shorter timeframe chart like H1 or M15. I have traded currencies in H4 timeframe before.
