timeframe in forex trading (Timeframe)
Trading on the Forex currency exchange takes place using a special trader terminal, while price movements are displayed on charts of currency pairs, each of which has two lines.
The vertical one, which displays the price value, and the horizontal one, separated by time intervals (timeframes).
Timeframe – time period characterizing price movement. Designed to simplify and unify the display of data in various trading terminals.
Very often, novice traders mistakenly assume that the name of the time frame in trading characterizes the duration of the time period, but in fact it is the period of one candle.
That is, we can say that H1 characterizes a trend section lasting almost two days, and if we reduce the scale of the graph, even more. But each candle will be exactly equal to one hour:
Therefore, you should not confuse the name of the timeframe and the duration of the trend segment that opens on the chart of the currency pair.
Basic Forex timeframes
Short-term – this category includes the first three time periods, lasting from 1 to 15 minutes.
M1 – suitable for pipsing and trading using the scalping strategy on Forex , it is on it that you can get maximum profit with a small deposit, using all the possibilities of leverage. The minute timeframe chart in trading best characterizes all the price changes that occurred during the hour:
M5 and M15 are used for short-term trading, but if desired, the duration of transactions here can already reach several hours.
It is also possible to use large leverage, but trading is already calmer than on M1. Medium-term - cover timeframe from M30 to H4
M30 - the best timeframe for intraday trading , here you can already apply most of the available Forex trading strategies.
One of the most optimal options in terms of ratio, profitability and risk. H1 is also convenient for intraday trading, but here you can already compare price behavior over two days.
H4 - makes it possible to evaluate the dynamics of the trend during the week, suitable for swing trading , or can be used as a source of data for technical analysis.
Long-term - now most brokers say that they do not limit the duration of transactions, that is, an open position can exist for a year or two. This trading option is more suitable for investment, when profits can be obtained over a long period of time:
True, there are some restrictions on the part of the exchanges themselves, for example, when trading futures.
D1 is a daily time period, in which each candle or bar corresponds to a day, that is, in fact, you can evaluate what happened to the price during the month.
W1 – this timeframe in trading corresponds to one week, while the chart displays a six-month period of time; it is also used exclusively for technical analysis.
MN – one month, thanks to this chart it is already possible to look back several years and evaluate Forex patterns , depending on seasonal fluctuations in rates or other factors.
In addition to the above listed timeframes in trading, you can also create your own version of a timeframe of a given duration, for example, 7 minutes, read how to do this - https://time-forex.com/sovet/nestandart-taymfreym
If you have not yet decided which you should trade from time intervals; the article “ Choosing a Forex time frame for trading ” can help you with solving this issue.