How to pick the best timeframes to use for trading

Julie Brownlee, Fsp Invest, 25 May. 2015

Tags: timeframes, picking timeframes, how to use timeframes, trading, trading tips, trading timeframes,

If you use technical analysis for trading, it’s important to know how to use the timeframes on your charts.

So how can you decide what timeframes to use?

Read on to find out…

How to select timeframes

When selecting the timeframes that suit your trading best, you need to focus on ones that suit your trading goals and fit in with your style of trading.

If you’re new to trading or don’t want to be glued to your trading screen all day, it’s best to start out with higher timeframes. By sticking with higher timeframes you have a better chance of seeing reliable chart patterns.

But you shouldn’t stick with just one timeframe when it comes to trading. You want to use a few different ones to give you a better idea of what’s going on.

Where to start with timeframes

It’s a good idea to start off with higher timeframes so you can see what the market trend is. Then work to lower timeframes to help you pinpoint where to enter and exit trades.

For example, you could start using weekly candlesticks to check the overall trend. This means that one candlestick represents a whole week’s worth of price action.

Then hone in to daily candlesticks, Frank Hemsley in Profit Watch explains. One candlestick now shows you a day’s worth of price action.

By starting off like this, you’ll be able to see the trend and what’s going on. You can plot trend lines on your charts to show this better.

Once you have an understanding of what’s going on in the market, it’s time to zoom in and look for potential trades. You could use four-hourly charts for example. This means one candlestick shows you four-hours’ worth of price action.

This will allow you to find any defined channels in the price action. You want to see strong support and resistance levels. When you find defined channels, it’s a good idea to trade with these until a break occurs.

It’s important to spend time playing around with different timeframes and pinpoint the ones that work best with your style of trading.

So there you have it. How to pick the best timeframes to use for trading.

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