I have some confusing with using time frame (I am not sure they are called time frames) on mt4 charts (M1, M5, M15, M30, H1, H4 etc). In the babypips school, in technical analysis, they use H1, H4 or sometimes D1 for analyses. I am not using those techniques for now because I am studying them still.
For now I am trading only using economic calender and free daily signals with M5 time frame for trading.
I need to know about difference among those time frames, when to use which time frame etc…
From my understanding the general way to use it is:
Large time frame is simply for trend (1D)
The middle time frame is where you decide on trading, place fibs, price levels etc (4H)
The small time frame you are looking for the entry point (based on the 4H) or the exit point (based on the 4H) so you would use a sch or a candle or something to tell you that it is the bottom and this is the price to buy/sell.
I could use some clarification on this topic as well. Right now I am using 1D for swing trade trying to catch trends or reversals. I use EMA’s, support and resistance and the ATR. I am still learning how much of an impact Economic News has my technical strategy though.
Ahh from what I have seen it’s huge. I’m trying the same idea using ema’s, S&R and ATR. The only difference is that I’m using stocks instead of forex. I’m using the same idea since the idea of volume is dead since you can do backdoor deals (this is something new they didn’t have a few years back). In reality you are trading the news all the time because the moved are based on what happens. The only thing is forex is all interlinked in a web so you get a ripple effect. So different news is going to effect each pair differently, depending on what it is and the scope. the ema’s are going to to follow it (which in my opinion is why everything that people say work with indicators are based on those ema’s). It’s going to do wonders to stops and S&R though. Same thing with certain futures and weather. That’s generally new since 2000, that if someone farts in India it’s heard in the US.
Economic news is big, a few of my trade’s stops were instantly hit when the EUR news came out. I think when I am employing my mechanical strategy and there is big impact news I might refrain from making the trade.
I have only been at this Forex game for 2 months though, so I am pretty noob still.
I also have had some failures placing trades real close to resistance/support areas, my strategy would indicate a long near a resistance line, only to get bounced off the resistance line and activate my stop.
The journey will be a long one, I am going to say about four years maybe three which is amazing. If it takes four years to get a degree and a decent job, then I wouldn’t mind developing my trading skills for 6 years if it will deliver passive income and more freedom, seems like a good trade off to me.
I think the choice of time frame usually comes by default when you pick a trading strategy or trading method. Upon using it many times you will be able to get the core idea of that method and then you can start experimenting things on your own. At that time you might go higher or lower (on time frame). I don’t have a right to say anything as I’m also still a novice by standard.
My advice, based on my trading experience is to avoid anything lower than 4H. Trading the lower charts is usually a hit and miss game. It might be exciting to be trading them everyday, along with the news events, but eventually it will become stressful and unrewarding.
I have been beaten up by those charts many times, only finding success on the higher charts.
Take this example of the NZD CAD earlier this year. Traders would have tried get in on it following the Interest rate decision by the RBNZ. The movement was sharp and some may have been able to get 40 Pips from the immediate move. But like most news trading, you wonder if 40, 30, 20, 60 is enough or can you get more? Since the decision also took place towards the end of the trading day, you may have been reluctant to hold overnight.
However, someone who would have been using the higher time frame would have already made their decision for entry and exit for much more pips
This trade was done based solely on the pattern and signal on the Daily Chart.
Take a look at my blog (drfxtrading.blogspot.com) as well as my thread in Swing Trading. You will see similar examples of trades and analysis done on these charts were trading is a lot simpler. If you are interested then you can get the Manual I developed based on this approach.
It really depends on your trading style and personality. If you’re a scalper, then you could work the shorter-term minute charts. If you prefer swing trading, then you could watch the hourly charts. If you like much longer-term position trades, then daily or weekly time frames could work for you.
Which Time frames to use depends on your strategy. You have to find it out of your own. Trading is for skilled people. Survival is the fittest. You have to be fittest to survive here. Invest your time in learning the art of trading. Babypips school itself is a good resources to start with.
Every trader has his own choice and comfort. Some traders use all the time frame to get the market vibes then take entry in a certain time frame like H1 or H4. I personally do not go below D1. I take my entry on D1. You have to find out by yourself which one you understand the most.
