Best Chart Timeframes for Trading

One of the most common questions that I receive on a regular basis is what timeframes are best for online forex trading. While there isn’t exactly a “perfect” answer for everyone, I do have a real preference.

Swing Trading Vs. Day Trading

If you look at charts with a timeframe of 10 minutes or less, I consider that day trading. In the basic Forex Sailing course, we use 4 hr charts to make trading decisions. In my own trading & in LIVE Forex Training, I use primarily 1hr charts to make online forex trading decisions.
Although you can feel like a much more “active” trader by using smaller timeframes in your trading, it’s not really worth it. Here’s why:

Volatility Increases with Smaller Timeframes

The volatility on a 5min chart is greater than on a daily chart. This is a fancy way of saying that smaller timeframes are less predictable. While many of the same rules apply, there is an added “fuzziness” or “noise” to the patterns. Little things that can cause a good trade to go bad.

Smaller Timeframes Require More Effort

The main reason that I like 1hr or 4hr charts for trades is that you can literally check your charts once or twice a day. Once you identify an opportunity you may pay closer attention to it, but not much changes while you go to work, or while your asleep.
When I say that I trade 20 minutes a day, this would be IMPOSSIBLE if I traded any smaller timeframes.

Bigger Gains on Bigger Timeframes

In smaller timeframes you may be going for 20-40 pips at a time. On 1hr & 4hr charts you might go for 100-800 pips per trade. One trade that you look at once a day for a week that can make as many pips as 5-10 smaller trades that require constant monitoring is certainly a “wiser” use of your time.
This also gives you more time to think. When you identify an opportunity you don’t have to rush into it. You can think about it for a few minutes. You can check your calculations. You’ve got time.

Where to Start?

These are the main reasons why I personally like the 1hr & 4hr charts for online forex trading. The reason why I teach Forex Sailing for free on the rapidforex.com website is because it truly is the best timeframe (in my opinion) to trade with.
If you are interested in day trading or scalping, it can be done. But if you haven’t mastered the smoother larger timeframes, I recommend you start there

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