One of the main reasons Forex traders don’t succeed and lose money is because they trade on the wrong time margins for their profile type.
Beginning traders want to learn how to become millionaires quickly so they trade in short periods of time, such as 1 minute, 5 minute charts. Then they end up feeling frustrated when they perform their trades because working under those time frames is not right for their personalities.
Finally, after long unlucky periods, we get to feel more comfortable trading according to the 1 hour charts. This period of time is somewhat longer, but not longer, and the signals are few but not scarce. Now we have more time to analyze the market and we don’t feel rushed to place trades.
On the other hand, we have a friend who could never work with the 1 hour chart. It would be very slow for him, and he probably thinks he is going to die before he can open a trade. He prefers to work with the 10-minute charts. This gives him enough time (not much) to make decisions based on his trading plan.
You’re probably wondering which time period is right for you. If you have paid attention, you will realize this depends on your personality. You have to feel comfortable with the time frame you are using to successfully trade Forex.
You will always feel a little pressure or frustration when you have open trades because it’s your money that’s involved. But you shouldn’t have those feelings because everything is happening too soon, as soon as you find it hard to make decisions, or so slow that you feel frustrated.
When we start trading currencies in the Forex world, we shouldn’t just stick to a period of time.
Time frames for trading can be categorized into these types:
. Hours (Intraday)
. Short term
. Long term
Which is better? As we mentioned before, this depends on your personality and your strategy, but to begin with, we recommend medium to long term time frames and forget about short term ones, where price behaviour is much more complicated to predict. We continue to see it in the next articles of this Forex course.