The time frame we trade from is important. Think of it like this: the larger the time frame the better the chance a price action setup has of coming off. Purely because a pin bar that forms on a daily basis has much more power than a pin bar that forms on a 4hr chart. Size matters in the Forex and the bigger the price action candle the bigger the momentum.
The daily time frame is the main time frame I use to mark my key levels and is my base chart. I will go hunting on lower time frames for trades but using the levels marked on the daily.
It’s far safer to start off trading on the daily charts and wait until you have mastered that time frame before moving to lower time frames like the 8 or 4hrs.
I am not a ‘scalper’ and the main reason is because it will fry your brain going to the lower time frames if you are a beginner. Discipline is something that needs to be mastered and starting on the daily will instill this very important attribute.
Yes, the setups are less frequent but this teaches us the art of waiting for the trades rather than manically following the market for trades.
The best way to kill an account is to go down to lower time frames and take trades.
One rule I stick to when I do venture onto the lower time frames is that I must trade with the current trend on that chart. Counter trend trades are for the daily time frames.
I follow these time frames: 1hr, 4hr, 6hr, 8hr, 12hr, daily and the weekly but I recommend that you start with the daily and then experiment with other time frames once you become more confident.
What is the best time to trade?
Whenever we enter a trade on the lower time frame, say the 4hr, we have to consider if it’s the best time to enter the trade and if we have the ‘right eyes watching’.
For example, if we took a 4hr setup on the EURUSD pair whilst we are trading through the Asian session would this be wise as Europe and America are not trading? I think not!
Always bear in mind which markets are open and if they can have an effect on the pair that you are looking to trade.
The best time to look for intraday setups on the 4hr charts for most pairs is:
*10.00 and 14.00 GMT (I avoid the 06.00 and 18.00 GMT).
As I am based in the UK, this makes up most of my trading with the final 22.00 GMT daily chart being my final time to check for setups.
If you are based elsewhere in the world and want to trade the Asian sessions, just make sure the pair you are trading includes either the JPY, NZD, or the AUD.
Time table for trading sessions:
London – opens at 08.00 and closes at 17.00 GMT.
US – opens at 13.00 and closes at 22.00 GMT.
Asia – opens at 22.00 and closes at 09.00 GMT.
Note: I merge the Sydney and Tokyo sessions together to make the Asian session.
The best time to trade is when two sessions overlap, purely because we have more traders moving the markets.
Module 1: The Basics
- Unit 1: What is the Forex?
- Unit 2: Forex terminology
- Unit 3: Fundamentals v technical analysis
- Unit 4: What is price action?
Module 2: Market Analysis
- Unit 1: How to analyse the markets
- Unit 2: What types of trades can we use?
- Unit 3: Marking support and resistance levels
- Unit 4: Time frames/best times to trade
Module 3: Price Action Setups
- Unit 1: Price action setups introduction
- Unit 2: Pin bar
- Unit 3: Engulfing bar
- Unit 4: Inside bar
- Unit 5: Sandwich combo setup
Module 4: Chart Setup
Module 5: Trade Management
- Unit 1: Trade plan
Module 6: Trade Psychology
- Unit 1: Psychology introduction
Module 7: Continue your learning
- Unit 1: What next?