Hi,
I just wanted to ask whats the best time frame to trade in for example 15min charts, hour charts or daily charts? a lot of people say its based on your personality is this true?
Also would you ever trade two time frames at once for example a daily chart and a 15 min chart?
cheers,
You should always trade using multiple time frames. You start at the highest frame you reference (for most people this is the daily chart), and then work down 1 TF at a time trying to discern a trend amongst them. Daily, 4H and 1H are pretty much the safest bet to trade.
My standard is to find a potential opportunity in the 30 minute (or lower) time frame and then confirm that the Daily chart agrees with it. Thereās no point in going long in a real trade because of the 30 minute chart and then flipping over to the Daily chart to find out itās been moving down for a month, unless you get lucky.
If you are trading long-term, obviously you will most use 4 hour and Daily charts. The trader āpersonalityā you are is mostly going to be your money management style/system. I highly recommend getting involved into money management early on.
As a beginner, start out with the Daily or 4hr. Once you are profitable on the Daily, then you can move to faster timeframes if you wish. You need to learn the psychology of trading at the same time as TA and FA and on the shorter timeframes you will find it difficult to cope with being stopped out after only a few mins.
I agree you should test out trading styles that involve several timeframes as the primary focus (for example long term position trading might focus on weekly & daily, swing trading might focus on 4hour, and scalping might focus primarily on 5min and lower)
I read a book recently (I think by Van Tharp) and he has some very good insights about the trading time/style you choose. Most likely, depending on your inner self, there is a timeframe/style that is a very good fit for you. The other styles may not be a good fit for you and no matter how much you try to force them, they may never feel right. The author suggested several weeks of trading each different style (ie position/swing/scalp) and see if any of them āspeak to youā ā you will probably know which one is best for you after doing this exercise.
Once youāve identified the style of trading you will focus on, then I agree you should at least be AWARE of activity in the higher-up timeframes. However, this does not always mean you have to be looking at multiple timeframes throughout your trading session. For example I look at them once, draw trendlines (which are carried to my primary trading timeframe) and then I no longer need to look at anything but the chart Iām placing trades on.
Iām not sure I agree with the above comment if youāre a short term trader. What are your normal profit target, because for EURUSD / GBPUSD which I trade the average daily range is approx 140 - 150 pips. Now if your trade targets are 50 - 100 pips, then the daily trend of the last month will be irrelevant to the current 30 minute trend. The 30 minute trend could go up for three days 400 pips, and not affect the longterm downtrend, and you would be short the whole time???
I do agree with following the trend for longterm trading like weeks to months, but short intraday, you have to follow your trends on relevant matching TF.
I note you didnāt say what sort of trader you are so I am only summasing you are intrady trading 30 min charts.
Daily chartsā¦
A time frame is a way to organize data. There is not the one and only time frame. If you have enough data you could zome out and in if you want to you do not need any higher time frame to confirm some trends if you trade under 1h charts.
I think that this is an impossible question to answer definitively. There are simply too many different trading styles, most of which can work well. We will each have a firm opinion on which timeframe we prefer to enter on (or at least we should have!) but that might not work as well for you. I enter on the Hourly, 240 or Daily, but there will be many on here who like the 1 minute or 5 minute. There is no right or wrong answer.
The one thing I would say, which has been said previously on this thread, is that it is important to look at more than one timeframe when āplanningā a trade, to give you a better chance of seeing where Price might move. For example, a line of S&R might be obvious on the Hourly chart, yet not clear at all on the 5 minute.
Iām talking about something like the USDJPY from 12/16/10-12/31/10. I was foolish enough to get into a buying trade because the setup looked great and I ended up losing a few trades before I flipped to the Daily chart and saw why I had lost. We clearly arenāt the same kind of traders though, so agree to disagree if you donāt agree 
trading longer timeframes carries less risk than shorter timeframes. Fact.
By the way, for those that do make a good profit on M1, all I gotta say is, wow.
So if I placed a short trade for example on my 4hr eurusd chart at 4250 and a second trade this time on my 5min chart at 4250, your saying that the 4hr one carrys less risk, is that the fact?
Doesnāt anyone trade price anymore?
Where does this idea come from that itās safer the higher up the ladder you are?
āmy life changed the moment I started trading the 4hr chart, I couldnāt believe how easy my trading had become. oh thank you 4hr chartā (insert vomit smiley)
Isnāt risk the same when you trade on a 4h chart or on a 5min chart?
I mean risk reward doesnāt really change. On the lower timeframes you are trading more noise but getting more entrys. But this doesnĀ“t mean on lower timeframes there is more risk involved.
Risk is just a ānumberā. A percentage. This number is independent from you time frame. If you are trading a style with a hit rate of 35% on a 4h chart. Is this riskier than scalping on a 1min chart with a 60% hit rate?
Iām largely a trend trader, and find that easier to spot on the higher timeframes. I can also target more pips, so my R:R is often better than I manage on the lower timeframes. But you are right to suggest that people should not simply dismiss scalping as being less effective. It is not for me, but I know guys who trade predominantly scalps and they do very nicely. So perhaps we can all be ārightā?!
As far as Iām concerned, this is another common MYTH.
One manās NOISE is another manās TREND (or something like that).
Yes, risk is the same and timeframe is irrelevant. Itās all about perspective and perception ā if you perceive a trend then you can trade it. Then again some of us trade anti-trends (ie sideways markets). The great thing about trading is that everyone is capable of finding an edge that speaks to them and everyone can make money from that edge.
I use H1/H4 and M5 (to get a good entry position) for day trading.
Itās working well for meā¦
All the timeframes work, as long as one looks at more than one then I believe that profitable trading is possible on any timeframe. The lower timeframes are choppier than the higher timeframes, so some traders prefer the more stable higher timeframes, others see opportunity in the moves on the smaller timeframes, but they all offer opportunities to trade. So I do not think that there are any myths, just preferences.
It is key to test out all the different time frames. As mentioned above though, whether your a scalper, swing trader or position trader you will need to have multiple TFs open.
The higher TF to outline the general trend (usually people have D1). And the lowest to fine tune trade entries.
Personally I use D1 to analyse general trend (where I think the market is heading in the next week say), H1 is my primary trading TF, and I use the 15min to find nice entries etc.
When I started out I thought that there was a lot of money in scalping, however as a ānewbieā this is usually a sure fire way to blow your account!
Personally, if your starting with a relatively small amount ($1000) then large swing or position trades are likely to be unsuitable since your account doesnāt have the funds to cover potential losses (as large TP & SL) even with smallest lots.
I would trade looking for 30-50pips a trade with SL around 20pips.
HOWEVER - it is up to you. Find what your comfortable with.
ā¦bet youāre so glad you asked.