Time Frames of Forex Trading: A Beginner’s Guide

This is a beginner’s guide that introduces the concept of forex time frames, their challenges, why they are useful, and how they can be implemented.Forex trading time frames are commonly classified as long-term, medium-term and short-term. Traders have the option of incorporating all three, or simply using one longer and one shorter time frame when analyzing potential trades.

This confusion can produce counter-productive unrest in the trader’s mind when attempting to line up trades. Therefore, it’s important for traders to plan the time frames they wish to trade in accordance with their trading strategy.A swing trader adhering to a trend following strategy should avoid making rash decisions when viewing price movements on smaller time frame charts. Traders may observe what looks like a trend reversal on a shorter time frame chart.

Incorporating a longer time frame allows traders to see a ‘bigger picture’ of the currency pair, to get an idea of general trends, or theTherefore, looking at the daily chart, it is clear to see that the downtrend is clearly still in force when observing the correct time frame.As mentioned above, the type of trading strategy adopted will greatly influence the forex trading time frames selected.

We recommend that you seek independent advice and ensure you fully understand the risks involved before trading. Information presented by DailyFX Limited should be construed as market commentary, merely observing economical, political and market conditions. This information is made available for informational purposes only. It is not a solicitation or a recommendation to trade derivatives contracts or securities and should not be construed or interpreted as financial advice.

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