If you just started trading, you are probably wondering how to choose a trading time frame. In the today's post, I will go through the common time frames, and explain when to apply them.
1m; 5m, 15m Time Frames These 4 t.f's are very rapid and are primarily applied by scalpers.
If your goal is to catch quick ebbs and flows within a trading session, that is a perfect selection for you.
30m, 1H Time Frame These 2 are perfectly suited for day traders.
Executing the analysis and opening the trades on these time frames, you will be able to catch the moves within a trading day.
4h, Daily Time Frames These time frames are relatively slow.
They are mostly applied by swing traders, who aim to trade the moves that last from several days to several weeks.
Weekly, Monthly Time Frames These time frames reveal long-term historical perspective and are mostly used by investors and position traders.
If your goal is to look for buy & hold assets, these time frames will help you to make a reasonable decision.
📝When you are choosing a time frame to trade, consider the following factors:
1️⃣ - Time Availability How much time daily/weekly are you able to sacrifice on trading? Remember a simple rule: lower is the time frame, more time it requires for management.
2️⃣ - Risk Tolerance Smaller time frames usually involve higher risk, while longer-term time frames are considered to be more conservative and stable.
3️⃣ - Your Trading Goals If you are planning to benefit from short term price fluctuations you should concentrate your attention on lower time frames, while investing and long-term capital accumulation suite for higher time frames.
Time frame selection is nuanced and a complex topic. However, I believe that these simple rules and factors will help you to correctly choose the one for you.
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