What Is The Best Time-Frame To Trade Forex?

forex trading

Truth be told, there is no answer. This common question among traders, especially the newbies,  has been left open for a while and has yet to find a definite conclusion. Traders utilize various time-frames to speculate the forex market, mainly long-term time-frames or short-term time-frames. Charts are used in forex trading to assist traders to analyse the trend, which is vital to tell which time-frames are the best to exchange currency. 

forex trading

With a designated forex platform Malaysia ready to be used, here are four types of time-frames traders can choose from for a better phase of forex trading in Malaysia:

  1. Position Trading Time-Frame

The position trading time-frame has a variety of trading strategies where the chart data can fluctuate from daily to yearly. It is a common practice among new traders who avoid this method due to its “long-term” nature (for the impatient individuals who need quick money) for the trade to begin. That is not the case. Position trading allows traders to look at the monthly chart for grading trends, and weekly chart for entry points.

Compared to shorter-term approaches like day trading (mentioned below), position trading is less problematic to execute successfully and requires simple strategy.

  1. Swing Trading Time-Frame

This time-frame method is a handleable approach for both new and experienced traders (even the most successful forex trader in Malaysia) as it involves a short-term and long-term trading time-frame. It requires a daily chart that determines trends or general market direction which shows the recent swing high and low respectively. Traders usually use swing trading to swing back into a preceding direction of the trend.

The benefit of swing trading time-frame is traders can still observe the charts to find openings for the rising opportunities, which eliminates the downside of long-term tradings.

  1. Day Trading Time-Frame

Compared to position and swing trading strategy, day trading is one of the most difficult time-frames to find probability. Traders, especially rookies, who approach this method will have to be exposed to more frequent trading decisions that may have not been practiced long. Unless their experiences are intermediate enough, this method may open doors to more losses, therefore it is not recommended for new traders who lack the skills in day trading. Traders with day trading options can evaluate trends hourly and locate entry opportunities on the minute time-frames in the chart. Because of that, choosing this method means that extreme caution must be taken whenever there are random changes and difficulties to attend to. 

  1. Multiple Time-Frame Method

You read this right! Traders do not necessarily need to focus on one specific time-frame only. In fact, with great multitasking ability, they can combine two or more time-frame approaches above to find more opportunities in the forex market. 

Forex trading is not about aiming for the best time-frame for trading or having a good setup, rather it is a profitable section. Trading forex may be highly volatile, but its success depends on how well traders can read the charts and the experiences they learned in the financial market.

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Wan Perlis