When it comes to trading, the time frame is your friend. These tools are designed to allow you to read up-to-date trading data so you can identify trends and make informed decisions about when to enter and exit markets.
You can see everything from the last 15 minutes of trading to the previous year and beyond. Many traders focus on the question of which time frame is better. But that’s not the point: in fact, sometimes it’s better to use multiple time periods at once. This article will provide some information on how to juggle multiple time frames so that it is convenient for you.
What is a time frame?
First, it is important to see what exactly is a time frame in trade and investment spheres. Time frames are a way to look at past trading data to set a trend. For example, if you apply a 15-minute timeframe, you may find that this tool – say GBP / USD forex pair – shows a bearish trend. It can also form a specific formation or pattern. For example, it may show an absorbing picture, indicating that falling prices are on the way.
The point of considering data in this way is that it provides evidence for your broader trading strategy. For example, if you are a day trader, you will most likely need to pay attention to deadlines that are persistent and urgent here and now: for example, one hour is likely to be more. more fruitful for you than one year. All good brokers should offer deadlines as a standard service – although it is reasonable to check Wealthify Reviews and others to get a complete picture of this in advance.
Clash of trends
Start experimenting with time frames and you will quickly notice the potential for conflicts and clashes. Take the example of the GBP / USD pair above, which shows a bearish trend over a 15-minute period. The same pair can, if a trader “scales down” to a longer period of time, like a one-day view, demonstrate a bullish trend – which is clearly contradictory.
At first, this can knock down a novice trader, as it can be difficult to contextualize competing information flows. As you might ask, can conflicting information be helpful? The immediate answer is that it may be reasonable to fit into the time frame of your chosen strategy, as outlined above. If you hope to keep stocks in the long run to experience capital growth, the one-year trend is certainly more important than the one-day trend – and vice versa. But you can also use all this complex and potentially contradictory information to get a fuller picture, regardless of strategy.
Strategic use of information
When you make a deal, it doesn’t have to be the same or a different term. Sometimes short-term time frames can be used to make actual trade decisions, while long-term time frames can be used to influence the overall strategic direction. For example, if you are trading in the long run, it may be wise to look at a longer period – maybe a month or a few months – first to work out a bigger picture and decide in which direction to trade.
But daily deadlines can still be used. Even though you have decided whether you consider the market bullish or bearish, monitoring the ideal entry point is still valuable. You don’t need to immediately enter the market if you decide to trade in a certain direction. Instead, you can use short-term information to log in at a time that suits you.
Ultimately, time frames are complex beasts in the world of trade. It’s not always obvious what’s best to use when it comes to using them – especially if the information is conflicting or unclear, or if you have no experience juggling more than one. However, it is very important to make the most of these tools, even if at first glance it seems difficult. By combining different time frames and using them as a starting point for entering and exiting trade, you can increase your chances of making better and more informed trading decisions.