Should you use different time frames when trading? Is it an advantage?
The use of different time frames must be justified by what the expected movement should be, if I search a rebound at a support / resistance then is a longer time frame better!
As a Day Trader what Time Frame?
As a Swing Trader, Day Trader or Long term investor is it easy to confuse yourself with a lot of different time frames.
Decide first of all in what time frame you are trading in, long or short-term trading. Once this is established, then make your decision within this timescale. For example if you have chosen to trade with a daily time frame then it is wise to stay there for different reasons, but mainly because different time frames often give different signals, it can on a daily basis look like you should go long, but at the 5 minutes chart it looks like a short position would suit better, how do you do? Go long or short?
A system is never fully complete, the market is constantly changing and today it can work perfectly by combining the daily chart with a 5 minute chart, but in the morning, then the two graphs might not play well together, and this leads to mistakes starts to occur. Therefore it is better to stick to one or maximum two time frames!
If you must have different time frames then try to keep them as close together as possible.
Long vs Short – Best Time Frames?
Advantages of using longer time frames.
- Better control
- Calmer trading
- Fewer “false” signals
Advantages of using short time frames.
- Improved accuracy for entry
- You can have tighter stop loss
- Greater flexibility
What’s your thoughts on this? Leave a comment!