The forex market allows you to trade based on multiple timeframes - 1 week, 1 day, 1 hour, 1 minute, etc. Which timeframe you trade from will determine how much time you spend watching the markets and how wide your stop losses and take profits will be. So which timeframe is right for you as a beginner?
If you are a beginning trader, I suggest that you don't trade anything less than the 1-hour charts. There are several reasons for this.
First of all, most beginners can't spend a lot of time watching the markets. They have school, work, and family responsibilities. To trade anything less than the 1-hour chart requires that you watch the markets at least 4-5 hours a day. Most beginners don't have that much time.
Secondly, the longer the timeframe, the more accurate and profitable the trading patterns and signals are.
For example, maybe you see a candlestick pattern that indicates a reversal is coming. If you are trading on the 15-minute chart, the reversal might actually occur, but it might only be worth 10-15 pips. But if that same pattern forms on a daily chart, you can be fairly confident that you will get 50+ pips out of that pattern.
Finally, when you trade on charts less than 1-hour, you have to make quick decisions. For beginners (and even some expert traders), quick decisions result in losses.
Larger timeframe charts give you the opportunity to plan your trades ahead of time. This means that you are trading pro-actively instead of re-actively.
Now, let me give you one more tip. Don't make trading decisions based on only one timeframe. Sure, you might like to trade on the 1-hour chart, but look at the daily chart to find the market trend and look at the 15-minute chart to time your entries and exits precisely.
Choosing a timeframe to trade doesn't mean you ignore the others.
