By James McKee
Once you understand what currency trading is it is important to consider your own personality and ability. While some traders might be able to make split decisions all day long, others might want to do intraday trades that last more than 24 hours on on the online forex exchange. Those who trade on a certain time frame will use the corresponding chart with “candles” that correspond to that period. For a 1 hour time frame each candle displayed will represent one hour’s worth of market activity. If you cannot monitor the market on at least a semi-regular basis than the one-hour or less time frame will not be ideal for you.
Choosing the right time frame to accommodate not only your trading style, but also your lifestyle can be a difficult balance to find. For most people it is a matter of trying out a variety of time frames prior to settling on one that works for them. Trying out everything from the 15-minute chart to the 8-hour chart can help new traders to understand how different strategies must be applied to different time tables. For instance, most of the time trends that occur are usually going to be found in the 15-minute time period, and they should be traded accordingly.
Those have a more responsive and extremely fast paced personality would probably be better suited for scalping. Scalping is a type of trading that revolves around targeting the shorter time tables (15 min, 1 hour) in order to make and take fast profits. While smaller in scope scalping also exposes the trader to less risk, and there are more trade possibilities during the course of a week. There has to be a balance determined by the trader with regard to which time frame is best for them, and this can be done easily by trying them all out in a practice account.
Testing out any new trading system or technique in a practice account prior to going live is very important. Figuring out what you stand to gain or lose by playing it out in theory prior to wagering real money on a decision is a good way to see not only whether or not it will be effective, but also whether or not it suits your own needs. If you are absolutely miserable on one time frame then go ahead and try another, and another until you have found something that works for you.ves.
About the Author
Author is a Forex trader and financial analyst residing in Denver, Colorado. To stay up to date on all the latest developments in the financial world and beyond be sure to check out the online forex trading regularly.
