subject: Forex Time Frames - Should You Use Single Or Multiple Time Frames? [print this page] The great thing about the forex market is that it is open 24 hours a day (Monday - Friday). This means that it's very easy for people all around the world to trade any time frame they like. However I personally believe that your ultimate success in this industry will not only be determined by which time frame you use, but also by how many you use.
The reason why I say that is because in my experience you are more likely to come up with a winning system on the longer time frames than the shorter ones. This is because on the shorter ones the price will often move in a random fashion, whipsawing all over the place. Therefore technical analysis is often a waste of time. However on the longer time frames the price generally conforms much better to technical analysis as much of the noise is eliminated.
I would also say that it's generally a good idea to look at more than one chart to boost your chances of making consistent profits. This is because even if you have what looks like a foolproof system using just one time frame, there may be times when you may be trading against the longer term trend.
For example you may have a great system that works well on the 5 minute chart. However if you were to get a long signal at a time when the price was clearly in a downward trend on the 15 minute and 1 hour chart, then you would probably end up with a losing position. This suspect trading signal could however have been avoided if you had looked at the longer time frames to check that you were not trading against the longer term trend.
I personally like to trade the 4 hour chart using my primary trading system that I developed myself. It's based on EMA crossovers but I will only ever trade in the direction of the long term trend, and I determine this by having a quick look at the daily chart, and a specific indicator on that chart, to see which way the price is currently trending.
So the point I want to make is that although you don't have to use more than one time frame, you will definitely increase your chances of success by doing so. This is because the longer time frames will indicate the current trend, so you can use the shorter time frame to pinpoint your exact entry point and ensure that you are always trading with the long term trend rather than against it.
Forex Time Frames - Should You Use Single Or Multiple Time Frames?
