What trading time frame is best suited for a beginner to learn effectively?

Beginner Questions
1

Hey all!

While doing some research on what the best time frame would be most suited for me to day trade in, I stumbled across an article on DailyFx.com that discusses time frames. I’m primarily interested in learning to day trade/scalp, but the article claims that all beginners should start with long-term approach, and only move to shorter-term strategies as you see success in the former.

I’ve hit the point in my education where I’ve just begun trading on a demo account, and I’m finding that using a long-term trading strategy is not particularly conducive to giving me timely feedback on my trades. That is to say, if I use the 1D time frame to assess overall trends, and the 4H time frame to find an entry point, I will probably be watching the same trade the entire day to see whether or not I’m making good decisions and good predictions. Whether it fails or succeeds, I won’t know until several hours later - as opposed to trading on 5M-30M-1H time frame, in which I will see very quickly whether or not I’m making good decisions, and can jump right into another trade right away. They say in the article I should start with an even longer time frame: 1W for trends and 1D for entry points.

To clarify, I’m not looking for a shortcut to become experienced, I know that’s something that will take lots of time and commitment. I only want to use my time efficiently and effectively, and engaging in 1-2 trades a day seems like a slow way to practice if my goal is to eventually become a day trader. Longer time frames also rule out the possibility to sit down and spend some time dedicated to practicing trading if my trades are taking place over a day or more.

My questions are: Am I incorrect in assuming that longer-term trades will not give me feedback as quickly? Is the article correct in that long-term trading is more suited to beginners? If I’d like to be day trading/scalping eventually, should I still start with long-term trades? I apologize if these questions have been asked elsewhere, I did a cursory search ahead of time and couldn’t find what I was looking for. Any advice is sincerely appreciated.

2

Short-term intra-day trades give you quicker results but also quicker losses. There’s no point trading on any time-frame until you have a comprehensive, consistent strategy that you’ve thoroughly tested in a demo account.

But day-trading is like starting driving by jumping straight into a Formula 1 car. I absolutely agree, start long-term, multi-day positions.

Once you’ve developed your TA and market assessment skills and knowledge, you can either stop these and go exclusively into intra-day stuff or do both if you can achieve the mental gymnastics necessary.

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3

Thanks for the quick response and solid advice. I certainly have no comprehensive or consistent strategy as of yet, and from what it sounds like I’m not liable to efficiently develop one if I jump right into intra-day trading (as enticing as it sounds).

In that case, I’ll continue to practice with long term, multi-day trades as I’m getting my feet wet. Thanks again!

Just to clarify, I’m currently using a demo account and will certainly not be trading with real money until I’m feeling very confident in my technical analysis and market assessment skills.

4

I think, long term trading would help you to learn Forex, so go with this trading system.

5

You are smart to stay on the demo until you are very confident with your trading plan. As for timeframes, a lot has to do with your personality and schedule. Let me give you some of my thoughts. Smaller time frames give you more trades per day and thus more experience. But only if you keep a log and analyze your trades. Larger timeframes really help you learn about market structure. Understanding market structure is where the big money is made. In a perfect world with no other distractions I would advice trading both small and large timeframes simultaneously.

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6

It’s a nice reply with great detail , appreciate ,

7

Trading style, initial capital and how much time you have available would be some factors to take into consideration.

Trading shorter time frames comes with more noise and more active screen time but requires less capital.

Trading longer time frames comes with less noise, less active screen time, but requires more capital.

Good luck and happy trading

8

I’m wondering then if it would be effective for me to try to engage in both long and short term trading as I’m learning - focusing primarily on long-term trading as a means to understand market structure and improve my general knowledge, and using the occasional short-term trading session as a means to watch the price movement at a much quicker pace. It sounds like what I’m hearing though is that long-term trading practice should be my highest priority currently, since it’s that competency with market knowledge and assessment that I’ll need to trade in the short-term effectively.

@PanchoVilla84
I was under the impression that it took more capital to effectively trade short-term, is that incorrect? My understanding was that since you’re trading on smaller scale, you need to be trading in bigger lots to make a good profit off of minor fluctuations in price - whereas the inverse was true for long-term trading. Please correct me if I’m wrong.

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9

Sound like you could use a simulator. I have not tried one myself but I would imagine that you could get quicker feedback for your test strategies that way.

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10

That’s a great idea, I had completely forgotten that a simulator was an option. That would allow me to engage in more trades without moving to a shorter, more volatile timeframe. Thanks!

11

Actually it would take more capital or reduced profits to trade a bigger time frame only. Think about it this way. Let’s say you knew for certain that the euro was going higher today. You could just go long the euro. The problem is that nothing moves in a straight line. So yes the euro will go up but first it will go down then up,then down again etc etc until it ends the day higher. You must have the margin and risk capital to ride out these ups and downs.

Same scenario, you know the euro will go higher. But now you drop down to a lower TF. Your entry will be more precise and your stop loss tighter. This allows for a larger position size/increased leverage and smaller losses when you are wrong.

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12

I guess it depends on the trader and money management strategy.

If you employ 1% risk per trade regardless of trading short term or long term, then the net $ risk remains the same, regardless of position size.

I would assume that long term trading in most cases requires larger stops and greater drawdown tolerance than short term trading. As a result, if you’re calculating risk using an equal account balance, your lot size would have to be smaller if trading long term.

So if your trading long term, you need a larger movement, an increase in risk, or a larger account to make up for the difference.

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13

For beginners D1 and H4 is the best. Lower time frame is very much volatile. Yes you will get the result quick. But for trading psychology plays the important role. Higher time frame helps more to build a good trading psychology. In lower time frame you tend to do over analysis and overtrade which are bad for trading.

14

Seeing different time frames pays nothing it will tell you better understanding of analysis As D1, H4 , H1 Nd M30 are popular time frames I see all these then trend finding and confirmation is easy. Rest of other factors also play their role in trading as risk management is much important.

15

I use to think that Time price chart is fractal in nature and firmly believe that if your strategy works on 1min chart, it should work on 1hour chart. Not anymore. I guess no one would be bother to research on that. There is simply no point to it.

As for feedback, it doesn’t matter what time frame to use. Just back test it. If your programming is good. Write some code and test your strategy. If not just use an excel sheet, and laboriously input number by number to test it. That’s what i do.

Nonetheless, if you want to test the effectiveness of an indicator on the fly with your naked eye. Try a 10 Tick chart. I believe that’s as fast as you can get.

16

I think the article of DailyFx.com suggested the right approach of trading for beginners. The beginner should stick to only one Higher timeframe either Daily or 4H unless and until he/she is able to understand the chart/price action correctly as well as feels confortable trading with it.

I use 4H TF as my Primary chart but I also take notes of Daily TF. I always align my 4H TF with Daily TF setup before taking any position.

For examply if the 4H TF showing a Bullish Trend and Daily TF is also confirming an Upward Movement then I would take a Long Position. However, I would use the 1H / 15M TF for taking an Entry of Long position in line with the 4H as well as Daily TF to get better price entry.

Meanwhile, I am quoting few Lines from the article of Nail Fuller “Trading Higher Time Frames Drastically Increases Trading Success” for your review as under:

The reality of the situation is that the lower in time frame you go the less accurate any trade setup becomes, therefore, by trading lower time frame charts all you are doing is lowering the probability that any trade you take will be a winner by adding more variables to the equation of forex trading.

Higher time frames act as filters of market noise

First off, by “higher time frames”, we are referring to the 4 hour time frame and above, any chart less than a 4 hour chart is considered a “lower time frame”.

Trading higher time frames is part of the K.I.S.S. forex trading strategy

Simplicity is one of the keys to forex trading success, it is very important to keep your technical trading strategy simple in design and implementation, because over-complicating your trading is a sure-fire way to begin committing emotional trading mistakes.

Patience is key, higher time frames foster patience

It is no big surprise that traders who take a longer-term view of the market and trade higher time frames make more money, on average, than day traders.

Price action signals are stronger on higher time frames

Finally, perhaps the most important reason you should stick to the higher time frames when trading the forex market is because they add weight to your trading strategy.

Although the post has become lengthy, yet it would get some insight on your question. It is not the final verdict on the subject, anyone can differ/argue from what I have posted above.

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17

I disagree. Trading lower timeframe chart just mean you have to glue your eyes to the monitor. It becomes a tedious way to earn money.

There are many successful trader out there trading lower timeframe.

18

You are right @alphahavoc. I respect your views.

But what I have quoted above was only meant for “Beginners point of view” and what you are referring pertains to “Experienced traders”.

19

Regardless of time frame. Beginner only lose money.

20

Thank you for all the excellent insight, everyone. I sincerely appreciate how helpful this community is.