Most Forex traders have no idea how or why Forex prices go up and they make fundamental mistakes in the frame when trading. In this article, we will look at three popular time frames and see which are the best time frames to trade in your trading strategy.
In the Forex market, all the basic supply and demand news will be shown in the price action and so for the opinion of all the traders, so let’s divide the price action into 3 time frames.
Long term trend
Currency major trends that last from a few weeks to many months and they reflect the economic and political health of the country’s currency. These big fundamentals gradually change from expansion to contraction and that is why these tendencies have persisted for so long.
Medium term trend
Although the big fundamentals prevail in the long run, in the short run the sentiment of the traders can push the price much higher or lower and these are seen in the intermediate trends, in the big trends which can be either with the main trend or vice versa. Typically, this trend will last from a few days to a week.
Short term trend
This is an action in a day and really it is a trend not a random price action at all. Prices can go anywhere in a day and they do.
Which is the best time frame to trade?
From the above it is clear that long term trend trading can give you the most profit with the least amount of work. All you have to do is enter the trend and hold on to it – but follow the long-term trend, only suitable for 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 make money in both time frames and what you choose will depend solely on your personality.
I haven’t mentioned day trading yet and it’s the most popular time frame for trading but it doesn’t give you any real chance of success. There is a big industry that sells junk robots and other, so-called less risky day trading and scalping techniques but they do not make money and do not harm day traders.
If you want to win in Forex trading, do not make the mistake that most people do and trade in the short term – trade in the long term and you will have adversity and you will be able to earn a great second income.