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One of the reasons newbie traders don’t do as well as they should is because they’re usually trading the wrong time frame for their personality.
New forex traders will want to get rich quickly so they’ll start trading small time frames like the 1-minute or 5-minute charts.
Then they end up getting frustrated when they trade because the time frame doesn’t fit their personality.
For some forex traders, they feel most comfortable trading the 1-hour charts.
This time frame is longer, but not too long, and trade signals are fewer, but not too few.
Trading on this time frame helps give more time to analyze the market and not feel so rushed.
On the other hand, we have a friend who could never, ever, trade in a 1-hour time frame.
It would be way too slow for him and he’d probably think he was going to rot and die before he could get in a trade.
He prefers trading a 10-minute chart. It still gives him enough time (but not too much) to make decisions based on his trading plan.
Another buddy of ours can’t figure out how forex traders trade on a 1-hour chart because he thinks it’s too fast! He trades only daily, weekly, and monthly charts.
Okay, so you’re probably asking what the right time frame is for you.
Well buddy, if you had been paying attention, it depends on your personality. You have to feel comfortable with the time frame you’re trading in.
You’ll always feel some kind of pressure or sense of frustration when you’re in a trade because real money is involved.
That’s natural.
But you shouldn’t feel that the reason for the pressure is because things are happening so fast that you find it difficult to make decisions or so slowly that you get frustrated.
When we first started trading, we couldn’t stick to a time frame.
We started with the 15-minute chart.
Then the 5-minute chart.
Then we tried the 1-hour chart, the daily chart, and the 4-hour chart.
This is natural for all new forex traders until you find your comfort zone and why we suggest that you DEMO trade using different time frames to see which fits your personality the best.
FAQs
A 10- or 15-minute chart time frame is for someone who wants to see the major trends and movements throughout the trading day, not each little gyration (like the 1- or 5-minute). If you want to trade on a 15-minute chart, build and test the strategy on a 15-minute chart.
What is the most profitable timeframe for trading? ›
Trading at the Opening of the Market
Volatility is not all bad. The ideal amount of volatility for beginners arrives in the market after these initial extreme trades have occurred. Hence, this makes the time frame between 9:30 am to 10:30 am the ideal time to make trades.
Which time frame is best for option trading? ›
Ans: The appropriate time frame for options trading depends on your purpose and research of the trade. However, a range of 30-90 days can be a good time frame for most trades.
What is good time for trading? ›
With all these factors taken into consideration, the best time of day to trade is 9:30 to 10:30 am. The stock market opens for trading at 9:15 AM and in the first 15 minutes, the market is still responding to the previous day's news with experienced traders waiting to make their move.
Is a 30 minute time frame good for trading? ›
Potential fast profits, I like that!
You don't need to spend the whole day in front of your computer monitor. You have so many opportunities in low time frames, that in 30 min to 1 hour, sometimes even less, you can make your day, close your computer, and enjoy life. That's what the trading lifestyle is about.
What is the number one rule in day trading? ›
The so-called first rule of day trading is never to hold onto a position when the market closes for the day. Win or lose, sell out. Most day traders make it a rule never to hold a losing position overnight in the hope that part or all of the losses can be recouped.
What is the 11am rule in trading? ›
It is not a hard and fast rule, but rather a guideline that has been observed by many traders over the years. The logic behind this rule is that if the market has not reversed by 11 am EST, it is less likely to experience a significant trend reversal during the remainder of the trading day.
What is the 10 am rule in stocks? ›
Some traders follow something called the "10 a.m. rule." The stock market opens for trading at 9:30 a.m., and the time between 9:30 a.m. and 10 a.m. often has significant trading volume. Traders that follow the 10 a.m. rule think a stock's price trajectory is relatively set for the day by the end of that half-hour.
What is the safest trading strategy? ›
The safest option strategy is one that involves limited risk, such as buying protective puts or employing conservative covered call writing. Selling cash-secured puts stands as the most secure strategy in options trading, offering a clear risk profile and prospects for income while keeping overall risk to a minimum.
How many times should you trade in a day? ›
To be honest, there's no set rule on how many trades you should make. There is no fixed number. It will depend a lot on you, your trading style, your risk-taking ability.
The right answer to this is that it depends on the type of trader and the strategy they use. Many part-time traders tend to spend less than one hour trading. On the other hand, full-time traders tend to spend more time trading on a daily basis (between two and five hours).
How do traders know when to buy and sell? ›
To know when to trade, day traders closely watch a stock's order flow, the list of potential orders lining up to buy and sell a stock. Before buying, they'll look for a stock to fall to “support,” a stock price at which other buyers step in to buy, and the stock is more likely to rise.
What is the 15 minute rule in trading? ›
Here is how. Let the index/stock trade for the first fifteen minutes and then use the high and low of this “fifteen minute range” as support and resistance levels. A buy signal is given when price exceeds the high of the 15 minute range after an up gap.
Which timeframe is best for scalping? ›
Scalp trades can be executed in 1 minute, 3 minutes, 5 minutes, or even 15 minutes time frame. However, the choice depends on the trade and the asset involved. The 15 minutes time frame is not so common. Beginners generally trade around the 5 minutes time frame to strike the right advantage.
Is a 10 minute time frame good for trading? ›
A 10- or 15-minute chart time frame is for someone who wants to see the major trends and movements throughout the trading day, not each little gyration (like the 1- or 5-minute). If you want to trade on a 15-minute chart, build and test the strategy on a 15-minute chart.
Is a 30 minute chart good? ›
If you plan to hold the trade for 5–15 mins (maximum), then looking at 30 min chart is not a good idea. So, finalize your trading system/concept first, backtest it and then start trading. Being an Intraday trader, I prefer 15 min chart timeframe as it balances both scalping opportunities and trend day opportunities.
What is the first 30 minutes trading strategy? ›
The first 15-30 minutes of the trading day between 9:30-10 am sets the tone for the day. Look for the high/low of the previous day and then the high/low of the first 30 minutes at open.
