by J Gammon

Created on: November 13, 2008

Selecting Your FOREX Trading Time Frame

Brave individuals who trade the frontier of FOREX can find excellent rewards for their efforts. Beginning FOREX traders probably already have some trading experience and skills in other markets plus some practice in FOREX. Trading skills from other trading investments can transfer to FOREX with some modifications.

FOREX trading relies on less technical market information than other markets. With no true central clearing exchanges, reporting is done at the will of banks that report trades and volumes. While price is clearly known, FOREX volume can be difficult to find and trust. Your broker may have a source for 'volume' but do not assume that is anything more than an indication of market interest. Even tick volume may represent only a portion of actual trades worldwide. So traders have access to current and past information on price and perhaps some indication of interest that is labeled 'volume.' all of this information can be presented to us graphically in various time frames.

Each trader has control of the data time frames that they trade. My accounts allow me to trade on tick, 1 minute, 5 minute, 30 minute, 1 hour, 4 hour, daily, weekly, and monthly charts. Yours are probably similar. I like the 15 minute chart for my primary view. However, I use ALL of the time frames above for various purposes related to my choice to day trade along with my 'volume' indication.

The present market, mid November, 2008, has levels that have not been visited recently. That alone accounts for using so many of the time frames for data analysis. Along the way we will consider some reasons various time frame assist in data analysis. But first consider some risks, rewards, and frustrations available for trading various time frames.

Various styles of trading will fall into fewer categories: 1. Day Trading - meaning no positions held overnight, whenever you sleep, 2. Swing Trading - meaning you may hold an occasional position less than a full day, but typically hold for a few days to a week, 3. Position Trading - a style that holds a position intentionally for several days to a few weeks, 4. Long Term Trading - indicating you may keep a position several weeks to some months.

A Day trader wants to book profits quickly and move on. This has some technical advantages that reduce risk: profits are quickly removed from market risk, there is a speedy mental reward on each success, and overnight risk is avoided which keeps the trader in control during

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