Friday, November 24, 2017

What’s My Experience with Different Time Frames and Their Reliability?

October 17, 2017 by  
Filed under Forex FAQ & Latest Post

In today forex faq, we have a question from one of our fellow traders asking me about time frame to trade and below is the question

According to your experience, what time frame is best for trading? Is some time frame more reliable then others or it doesn’t play any role?

What’s your experience with different time frames and their reliability?

Frankly speaking, a strategy that works on the 15 minutes chart will also work on the hourly chart and 4 hourly chart and even the daily chart. But of course you can’t use the same stop loss for all of them.

A candle on the 15 minutes charts is typically 3 to 5 pips on a normal market while a candle on the daily chart can go from 40 to 80 pips. Therefore if you use a stop loss of 25 pips on the 15 minutes chart, it will be easily stopped out on the daily chart.

This do not mean that the strategy that works on the 15 minutes chart do not work on the daily chart. It does work the same except that you need to fine tune the stop loss and target profit due to the different price range.

If you ask me for my favorite time frame, it will be the 15 minutes chart as I find that this time frame has the best volatility and optimum false alarm noise trade.

I understand that a lot of new traders like the 1 or 5 minutes chart but I find these lower time frame to produce too much false alarm trades.

After years of trading, I realized that the 15 minutes chart gives me the best optimum false alarm vs trade frequency.

For the lower time frame like the 1 or 5 minutes, you will get more trades frequency but at the same time also more false alarm trades that causes you to make more losing trades

For the higher time frame like the 4 hourly and daily chart, you will get less false alarm but you will also get lesser trades as well.

Personally anything 15 minutes and above are pretty reliable time frame but you need to understand your time availability and objective in trading.

If you do not have much time to look at the chart everyday, the 4 hourly is a good time frame for you

If you have 1 to 2 hours per day, I will recommend that you go for 15 minutes or the hourly chart.

All of these comes from my own trading experience and this is just my personal opinion on the time frame. I hope that I have answered your question and if you have any more question, do feel free to email me at [email protected] and I will try my best to assist you in the best of my knowledge.

Comments

One Response to “What’s My Experience with Different Time Frames and Their Reliability?”
  1. Robert says:

    Kelvin, thank you very much for your answer!
    It will help me to solve my doubts about different time frames and improve my trading.

    All the best, Robert

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