Most Forex traders have no idea how or why Forex prices move and make key mistakes in how they trade on time frames. In this article, we will take a look at three popular time frames and see which is the best time frame to trade for your trading strategy.
In the forex markets, all the fundamental supply and demand news will show up in the price action and so will the opinions of all the traders, so let’s break the price action down into 3 time frames.
long-term trends
Major trends in currencies that last from a few weeks to many months and reflect the economic and political health of the country’s currency. These great fundamentals slowly change from expansion to contraction and that is why these trends last so long.
Medium-term trends
While great fundamentals prevail in the long term, in the short term, trader emotions can drive prices up or down a lot and this can be seen in mid-trends, within the big trend that can be with the main trend. or in the opposite direction. Typically, these trends will last anywhere from a few days to around a week.
The short-term trend
This is the action a day from now and it’s not really a trend at all, it’s just random price action. In one day prices can go anywhere and they do.
What is the best time frame to trade?
From the above, it is clear that trading the long-term trends can bring you the most profit with the least amount of work. All you need to do is enter the trend and hold it, but long-term trend following only really suits a trader who is patient and disciplined.
Trading medium-term trends can be very profitable and requires less patience and discipline than trading long-term trends. You can earn money in both time frames and which one you choose will simply depend on your personality.
I haven’t mentioned day trading yet and it is the most popular time frame to trade but it doesn’t offer any real chance of success. There is a huge industry that sells junk robots and other so-called day trading and low risk scalping strategies, but they don’t make any money and the day traders lose.
If you want to win at forex trading, don’t make the mistake that most people make and trade short; trade long term and you will have the odds on your side and you can make a great second income.
