While trading in forex, the time frame required for trading can become an issue for most of the new traders. What usually happens is that new traders generally don’t like to wait for several hours and check the time frames then. They are mostly inexperience and they want to make quick money. On the other hand, there are many traders who like to keep it very old school and conservative and chose for long time frames like 1 hour or even 4 hours. This gives them accurate readings of the currency they want to trade in and hence it becomes possible for them to do exactly what they wish to.
However, for each kind of trader, whether big or small, new or experienced, the first priority should be to trade in multiple time frames. When this is done, you get a safety net to land on. What specific time frame you chose depends on how much you really want to make and what are your long terms goals in the trading market. It is always good to keep shifting your time frames and give enough gaps in between the time frames so that the currencies can shift themselves.
The main reason behind a multiple time frame trading is that it gives quite a lot of time for the traders to change their priorities according to the change in the values of the currency. In the long term, which can extend up to and year or more, the currencies can show a very stable exchange rates. However, when we break it down to medium time frame like a month, there will be more fluctuations in the rate while in shorter time frame like a day, there can be heavier fluctuations.
As a smart investor, you must believe in making the most of forex. Therefore multiple time frame trading becomes a must. The categorization of short, medium and long term trading can different from trader to trader. A trader who feels more comfortable in assessing the minute by minute records can choose a 1 minute, 5 minute and a 30 minute time frame in order to trade. On the other hand, traders who predict the long term exchanges right can go for a 1 hour, 4 hour and daily or weekly exchanges. The combination is entirely dependent on you and the kind of trading practice you feel best working at. Though make sure that in multiple time frame trading, deciding the gap between the time frames is very important. So always choose such timing that the currencies really get to change their dimensions.