Timeframes

Trading Timeframes are critical to your technical analysis of price information.

In broad terms here is a list of the timeframes you can use:

  • Intraday (getting in and out within one day)
  • A few days
  • A number of weeks
  • A number of months
  • A number of years
But the critical factor is that the probability of a successful trade increases to the extent the timeframes are in alignment.

So for example if you are looking to go long USD CAD and the one hour chart shows an uptrend, the trade has a higher probability of success if the four hour and the daily chart also show an uptrend.

At least once a week you also want to look at the long term price trend. This is useful for gauging historic highs and lows and historic support and resistance points. It can also show you how high or low the price might go.

I recommend looking at the monthly chart of any financial instrument you are about to trade.

You certainly should always look at multiple timeframes when taking a trade. Ideally only trade when there are multiple convergences across all timeframes.

I also recommend frequently looking at longer term multi-year timeframes. I have found an excellent resource for long term charts:


Your Personality

You will find that you naturally gravitate to a particular timeframe. That is great because you want to trade in line with your personality. My favored timeframe is daily charts. That is because I like to take multi-day and ideally multi-week trades. However a day trader might gravitate to 5 minute or 30 minute charts. But even though I look at daily charts for my signals, I will always look at the hourly chart to see where my best entry point and stop loss point will be.

 
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