Breakdowns of Forex Time Frames

Everything that you do depends on you and your level of comfort when it comes down to making the trades and breaking the entire time frames down to fit what you want, when it comes to the market. If you like to take things slow and then find out that some of the longer time frames might be the best thing for you to trade on, or if you cannot sit still then maybe you should try out the shorter time frames. It all depends on what you can handle and what does not overwhelm you.

There are differences for each time frame, and below there is a chart that shows each difference for each of the time frames:

Time Frame Description Advantage Disadvantage
Short Term Use hourly trade platforms. They also hold their trades for anywhere from a couple of hours to a week. More opportunities for a trade, and there are less chances for losing months.

You do not have to rely on one or two trades per year in order to make money.

Higher transaction costs because there are more spreads.

The overnight risk becomes a factor.

Intraday These traders use minute charts such as the 15 minute or 1 minute charts.

Trades are done throughout the day, and stop when the market closes for the day.

There are a lot of trading opportunities open.

There is less of a chance of losing months.

There is no overnight risk.

The transaction costs will be much larger since there are more spreads to cover.

You need to change frequently so there is more user fatigue.

Profits can be limited since they need to exit at the end of the day.

Long Term When you’re a long term trader then you usually use the weekly and daily charts to base trades off of.

The weekly charts that are used can establish the long term perspective and assist in placing the trades in a short term daily market.

The trades last from a few weeks to sometimes months depending on the specific trade being made.

You do not have to watch the market all day.

There are fewer transactions which allow you less time to pay any of the spreads.

There is more time to think through each of the trades that are being made.

Usually have large and longer termed swings.

There are only 1 or 2 goods per year, so you may have to have patience.

You need a bigger account to trade in this time frame.

There are more frequent months where you lose.

You have to keep in mind the capital that you’re trading, and the amount you have. If you use shorter time frames, you have the ability to make better use of the margin and have a tighter stop to any losses. If you trade with larger time frames then it requires bigger stops which means you need to have a bigger account. This is because you need something to handle any of the market swings that come your way without having to face a margin call.

Whatever time frame works best for you depends on what type of personality that you have, and what time you have on your hands. If you do not feel that the time you check out fits, then you need to find out which one does by checking them all out.

Demo trading is strongly suggested, using all of the time frames, since you want to be able to find the comfort zone that fits you while trading. This helps you determine which works best for you, and also allows you to find out without having to put actual money down on it. Once you decide on the time frame, you can then look at the different time frames to analyze the market at hand. is committed to educating the forex trader in all aspects of foreign currency trading. Click here to get information on a free forex webinar to help you maximize your success in the forex market.