Forex Time Frames
You may have heard of the various forex time frames.
For example, you can trade the hourly and 4 hourly charts, but what if the system requires that you adjust your stops below a trough as the trough occurs? This means that you may need to be awake at 4am to do it!
So as you can see, it depends on the rules of the system as well.
This may not be the most practical kind of set up.
Alternatively, there are systems that trade the 5 minute charts, and you do so for 3-4 hours in a row. It's a discreet period where you trade and you do it and then you stop.
The consequence of this is that you need to focus during those few hours and place orders, adjust stops and profit targets etc in that time.
What about the daily charts?
Yes this can be traded as well, but because the candles are bigger, if you place stops below troughs formed by daily candles, then the pips risk may be very large, so some systems therefore use a shorter time frame to place stops in this case.
Or alternatively, the system may not use the bottom of the trough to place a stop loss.
So the factors are:
1. Your system, and which time frame it works in.
2. Amount of time taken to trade and whether you want it in discreet blocks of time or to watch the trade less frequently but may have to place or adjust orders in odd times of the day.
3. The timezone you live in, and whether you're awake at the times the currency markets are active.
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