Which Time Frame Charts Should You Trade?
In this weekly video:
00:29 – Understanding which time frame chart to trade
01:14 – What can you do to select the right chart to trade
01:56 – Examples of how to select the best time frame
02:52 – Live webinar with my clients
03:53 – I took trades live on the webinar for excellent profit of +1.5% gain
05:15 – Don’t always trade just 1 time frame chart as you’ll limit options
06:45 – Live Webinar – Free to attend for non-clients
How do you know which currency timeframe you should be trading? Let's talk about that and more right now.
Hi Forex traders, it's Andrew Mitchem here, owner of the Forex Trading Coach with video and podcast number 268. I want to talk to you about a really common problem that almost all currency traders go through
Understanding which time frame chart to trade
It's all about understanding which timeframe chart you should be trading. You see, a lot of people get really confused by this. They think that they must be needing to trade short timeframe charts because that's where the price action is, right? That's what everybody tells you, you need to be trading five minute charts and scalping, looking for all these small movements within the overall flow of the day. A lot of people also get confused with thinking that I can't trade longer timeframe charts because the stop loss needs to be too big, and I don't have a big enough account size. So there's all these misconceptions there; both of which, by the way, are completely wrong. There are ways around all of these things.
What can you do to select the right chart to trade
What can you do to select which timeframe chart you need to trade? Well, a lot of it comes down to having the ability to be open and flexible and to basically see what's happening in the market right now, because no one really knows like next week what's going to happen. No one knows. You can have predictions and economists and all these type of things going on, but really nobody knows what's going to happen. All we can do is see what's happening right now. So to give you a great example. Today is Friday … It's Friday the 13th. It's Friday the 13th of April, 2018, when I'm recording this right now.
Examples of how to select the best time frame
This last week has been very, very poor for trading the daily charts. There have been very few set ups. I love trading the daily charts, and I post daily chart set ups to my clients on our membership site and there have been very few this week. So it's not to say that everybody has missed out, it's to say that the daily charts for whatever reason, and it's quite rare, but for whatever reason have not produced very many high quality set ups this week.
Also, the weekly charts this week on Monday there were no suitable, in my opinion, weekly chart set ups. Now the weekly charts are less surprising, because last week was Easter and then on last Friday we had the US monthly job report, so not a lot happened last week. So I can understand the weekly charts for this particular week not showing a great deal. However, it's been quite an unusual week in that the daily charts, the longer timeframes, have not shown much also.
Live webinar with my clients
However, I took a webinar last night … I had a live, two hour webinar with my clients like I do every two weeks. By the way, every week in between Paul Tillman holds the US webinar sessions. So clients get a weekly two hour webinar. But last night I held a webinar. Two hours long, and on that webinar I showed many, many great examples from just this week of the six hour chart trades showing some very good quality set ups. Also in general it was the commodity currencies, the New Zealand dollar, the Canadian dollar, the Aussie dollar, this week for whatever reason showed more high quality set ups than most of the other … Like the Euro and the Pound and the Yen and the Franc, all those sort of currencies didn't really show as many good set ups. So this week it was definitely a week to be trading the commodity currencies.
But of course, earlier in the week you wouldn't have known that. It's only what you see at the time right now that you can then take those trades.
I took trades live on the webinar for excellent profit of +1.5% gain
Also, on that webinar I took a fantastic buy trade on the New Zealand/Yen on the four hour chart. It hit the profit target within under one bar, so in under four hours, and it made it 1.8 to 1 reward to risk. Or half percent risk on that trade, 0.9% account gain. It happened while I was on the live webinar. I also took a sale trade on the Euro/New Zealand dollar on a 15 minute timeframe chart, and that made a 1.2 to 1 reward to risk, or in other words half percent risk, 0.6% account gain.
On that webinar, in front of my clients live while they were watching, we had two trades close for profit. The 0.9 and the 0.6% gain, half percent risk on each. Made us a 1.5% account gain, just on those two trades. The 15 minute chart trade took I think it was 25 or 28 minutes to hit the full profit from when I took it live to when it exited for the full profit. So 1.5% account just on those two trades. Now that was a four hour chart trade and a 15 minute timeframe chart. Both involving New Zealand dollar by the way, which as I already said was showing good trades … The commodity currencies showing particularly good set ups for this week.
Don’t always trade just 1 time frame chart as you’ll limit options
So it shows what can be done when you're selective, and when you don't force yourself to stick to one timeframe chart. Don't just say, “I'm going to trade the one hour charts.” Well, maybe the one hour charts aren't showing particularly good set ups? “I'm going to trade just the daily charts.” Well, again, this week you wouldn't have taken very much. If that's all you want to do that's absolutely fine. When I'm travelling, I trade just the longer timeframe charts and that's it. But this week, I'm at home and I saw that great set up on the four hour chart and the 15 minute chart whilst on the live webinar. Two excellent trades, two worked out beautifully. So it's all about understanding what's happening in the market right now, which currencies and which timeframe charts are showing good set ups at the time. Really that does come down to having the ability to scan through different timeframe charts.
The way I trade, I only look for a new trade at the close of a candle anyway, so with the four hour charts for instance there was really simple … I wasn't even at my computer when the four hour chart closed. As I was preparing for the webinar, I saw that the price had pulled back to my retracement entry level, and I just simply took a market order whereas normally on the close of a candle I would have taken the retracement order. Both would have got filled at the same price, obviously. Both would have hit the profit target. It's just that on that particular occasion, I was taking the market order because the price had already pulled back on a buy trade.
Live Webinar – Free to attend for non-clients
So, if that interests you, you need to be on my live webinar this coming week. It's going to be on Thursday the 19th of April, or Wednesday the 18th of April if you live in Europe or the US. I will put a link below this video and podcast. It's going to be a live webinar with myself and Paul Tillman. Make sure you're on it; it's going to be a great opportunity. I don't do these very often, just free-for-the-public webinars. It's a great opportunity to ask questions and see how we trade.
So once again, this is Andrew Mitchem, owner of the Forex Trading Coach. I'll see you this time next week with some more Forex news, tips, and information. See you then, bye.