5.3 Selecting The Best Time Frame for Trading 

 
This is a very important question for greenhorn traders.
 
The best time-frame charts to trade with. 
 
Basically, it depends upon your personality. The shorter your time frame, the closer you are to the market, and therefore likely to feel the emotional pressures of greed and fear that much more. Also, shorter time frames tend to increase your trades, and you may end up enriching your broker more than yourself. This is not to say that you should only trade the longer terms – as we said, it all depends upon your personality.
 
But well, though personality type is one of the basic criteria in selecting the suitable time frame for trading but it is not the only one. Your risk appetite and account size are equally important criterion. When you are trading with longer-time frame charts, the positions may need to be kept open for long-term to take full advantage of ongoing trends. However, when a single loner-term trades offer the possibilities of higher returns per trade, you also would need wider stop-loss levels and that calls for more risk appetite as well a bigger account balance.
 

Which time frame for your personality type?

 
The best way to find out the time frame that suits you best is to practice each term and test your results. Use a demo account to this. 
 

Your account balance and time frame for trading

 
You may think that you have sufficient balance to place a trade but remember that that itself is not sufficient. You need to consider the margin requirement in case the trade goes against you for some-time before catching up with the direction you had analyzed. If your account size is small then trading with shorter-time frame charts with narrower stop-loss and profit target levels is better.
 

What Time Frames a Professional Trader Would Trade?

 
Which time frames to trade is actually a quite important factor in shaping the trading strategies and hence shaping the trading career. Many of the new traders wish to see money coming in every few minutes. That is exciting, right? But what is exciting may not be profitable because when trading with very short-term time frames may increase the periodicity to get profitable trades, it also increases the periodicity to make losses. Not all trades can be profitable for even the most proficient and experience trader. 
 
Experienced and professional traders would not trade on very short-time frame. We would say that to get the real insight the market, the minimum time frame of the chart would be 4 hours and then daily and weekly. 1-hour chart can be used for fine-tuning the entries but any time-frame below that is like trading with the market noises and not the market itself.  And well, we wish to trade with the market, right?
 
Any professional trader will not enter the market with every spike here or there. In fact he or she will not take a position unless they are sure about the overall trend situation on the broader level. 
 
A thorough analysis of the overall trend on longer-time frame charts is must before you plan your strategy for specific trades. Charts of shorter-time frame like hourly charts can then be used to fine-tune the entry points and sometimes exits too.
 
Remember that you don’t need too many trades to increase the profits; you need a few correctly placed trades to move your way for a longer time for bigger profits.
 

 

 
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