In this video:
00:32 What is the best timeframe chart to trade?
03:06 5.8% return on two trades
06:18 A huge weakness in the USD
What is the best time frame chart to trade Forex?
What’s the best time frame chart to trade? What suits you? Well let’s talk about that right now in this video.
Hi it’s Andrew Mitchem here the Forex Trading Coach. Welcome along today is Friday the 17th of October 2013 and that’s right I want to talk about the timeframe of charts. See behind me here I have three different timeframe charts open – ones on the daily charts, ones on the four hourly and ones on the one hourly. What is the best timeframe chart to trade? Everybody is also looking for the best strategy but what is the actual best timeframe? And really the answer is that it depends on what suits you because there is no right or wrong way and let me explain exactly what I mean.
Weekly Chart Trading
I held a live two and a half hour webinar for my clients last night my time in the European session and we had people from all sorts of different countries around the world. I want to talk about that three people. The first one actually wasn’t on because he was working. He lives in Noosa over in Australia. He was actually my very first client, my coaching client back in early 2009 and this person, he owns a restaurant and he’s also a chef so he’s a full time chef and a restaurant owner in beautiful Noosa over in Australia in the Sunshine Coast. Lovely place, got to go there if you’re not been there. He works days and nights being a chef and so he trades weekly charts. He just look at the charts once a week for about fifteen, twenty minutes on a Monday morning his time looking through the weekly charts. Places his trades if there any there puts away, leaves his trades, that’s it for the week that’s this trading. He trades about an average of only 100 trades per year but it still does really well and it’s what suits him.
5 and 15 Minute Charts
We then take to the other extreme and we had Robert from over in Oregon in the US on the webinar last night early hours in the morning for him and gets up to my webinar because he just learned so much information. It was great sharing that information that he knows also about the five minute charts. Now he took two trades on the British Pound/USD yesterday and his trading style is to look for just the major pairs with the tightest spreads on the five minute charts sometimes the fifteen minute charts in the first two hours of the Asian session and the first two hours of the European session. And he took two trades and shared those two trades yesterday both on the British Pound USD, both buy trades trading with the longer term trend but on the short five minutes charts because that’s what suits him.
5.8% return in just 2 trades
One trade made a 2.8 risk to reward and the other made a 3 to 1 risk to reward. So if you are risking let’s say 1% of your account on each of those two trades because they’re both taken separately when one is close when the other one are opened. That would have been a 5.8% return by risking 1% on each of those two trades – that’s a huge return Robert actually only traded on half percent for a +2.9% gain on his account by risking only half of 1% on each of those two trades. And like Robert said that’s more than his bank will pay him in the States in the entire year and he made that just out of two trades on the five minute charts just yesterday. So it shows what it can be done.
4 Hour and 1 Hour charts
I had another person on the webinar, Pete was there, and Pete was on his first webinar and he said, “Look Andrew I can see a really good trade on the AUD/CAD on the four hourly charts.” And I looked at the chart and I said, “Yup, hey I totally agree and let’s jump in on that trade when the four hourly charts closed.” And Pete emailed me this morning he said, “Look Andrew great trade, worked absolutely perfectly like an absolute A Grade setup worked just it trade and Pete told that he made a 2.2 risk to reward trade on the retracement entry and a 3 to 1 risk to reward on the market order so very high risk to reward trades. It doesn't matter whether you’re trading weekly charts and only taking a number of trades per week, maybe one or two sometimes none. Or if you’re trading like Robert who trades five and fifteen minutes charts but takes multiple trades per day. The advantages you’re getting a lot of trade setups; the disadvantages you need to be very patient with your trades, wait for the trades setups not jumping in too quickly. And then in between you get someone like Pete or myself who like trading the four hourly charts, I also like the one hourly chart but you can see the risk to rewards there.
Why I like trading the 4 hour charts
For me I just love four hourly charts because I know that every four hours is the only time I need to be at my computer. Right now as soon as I finish this video I’m off to my kid’s school day today. I’ve got another three and a half hours before I need to be back home so I can go off for today I don’t need to be sat watching the charts every couple of minutes waiting for setups because I don’t need to, that’s not my style of trading. But you can see by the results that I’ve talked about on just yesterday’s performance how the timeframe suits your personality. How much time you can dedicate to your trading? Do you like sitting at your charts for a couple of hours in each session or not? Do you like to take trades just once a week if you’re trading then like that and you’re working full time you might say, “Hey I just want to trade just once a week for fifteen or twenty minutes.” But my trades on the weekly charts walk away, leave it for the week; come back at the end of the week and see what happen. So really is whatever suits you.
Huge USD$ Weakness
Just quickly on to the charts themselves, a huge weakness in the USD as of yesterday. The US finally I think it made up what’s its going to do there’s an agreement anyway. But the rest of the world not looking to kindly on the way that the US been around right now, huge weakness on the USD and so that probably is going to continue and that’s anything major happens today or over the weekend into next week.
So enjoy your weekend have a fantastic time. Look at those charts and trade what suits you. That’s the most important thing I can say in terms of time frames.
So look forward to talking to you this time next week. This is Andrew Mitchem from the Forex Trading Coach.
Bye for now.