As a trader, you must have heard about the time frames or you must have even used them in your trading. Time frames are pretty crucial when it comes to finding the right entry and exit points. So how profitable you might be while making a trade completely depends upon time frames. So, there’s no way that you can look away from selecting time frames.
One of the main reasons behind the trades failing is not choosing the right time frame. Traders often lack awareness about the time frames and wonder about it while some others neglect it. So, it is very important to have a clear conception of what time profits are important for a trader. Time frames need to choose based on a traders trading time.
For your benefits, you should keep in mind that time frames are of two types. One is the higher time frame while the other is the lower time frame.
Higher time frame is the time frame where price values change over 1 hour to 1 day. On the other hand, the lower time frame is where price fluctuates within 1 to 15 minutes.
In lower time frames, the UK trader doesn’t need to constantly monitor the trendlines or price charts frequently as the price remains the same for quite some period. That’s why this method of the time frame is overly popular among the beginners and mainly used by day traders, swing traders etc.
On the other hand, you need to keep a keen eye on the price charts to know about the possible price changes in lower time frames so that you don’t lose a big deal of your hand. In this frame, even though one needs constant monitoring, it provides the traders with more trading benefits than higher trading frames. Use this link and trade the higher time frame in the demo account. You will definitely feel more confident with your trading approach.
However, the concept of lower trading frames still has some side effects on the traders like it is pretty hard to find the trends as the time limit is very little and the price movement is very high. It also harms the mentality of the traders. That’s why many traders prefer using higher time frames which have almost no side effects except for lower trading opportunities.
So here are some benefits of using higher time frames.
The trends are visible
In lower time frames price fluctuation is so high that it becomes impossible to look at the chart and understand where the trend is going. It is mainly used by long term traders to speculate the market over a long period. But if you are using higher time frames, the price changes in a minimal amount and helps to show the direction of the trend whether it is going up, down or sideways. It also acts as a filter to give the traders a clear picture of how the market looks.
Simple trading strategies
As traders don’t need to rush to make profits in higher time frames, they also don’t need to use complex and risky trading strategies. A trader cannot make money in lower time frames consistently compared to the higher time frames. That is why they come up with the most complex strategies to apply in their trades.
So, if you are a high time frame user, you don’t need to worry about your strategy is simple and you can easily deal your trade with a simple one.
As the price changes rapidly in lower time frames, traders are often rushed to make decisions in lower time frames. Now making decisions in time frames can be a bit tough as your profit and loss, both depend on the decision you make. As a result, there’s more chance of making a loss when you take a decision hastily. But in higher time frames, a trader can take his time and come up with the best suitable decision.
So, you can see that as a trader using the higher time frame is more beneficial and money friendly. This time frame can be used by all traders and not restricted to a certain trading style.