How to choose the time period for foreign exchange trading?
The time period is consistent with the trading style, which can be divided into four trading styles according to the trading time, and each style corresponds to a different time period.
Ultra-short traders like to use the 5-minute line, day trading like to use the 15-minute to 1-hour period, band trading like to use the 1-4 hour period, position trading generally adopts the daily, weekly, monthly line.
The time cycle is short, and they can monitor the market changes at any time and not miss any opportunity, but inexperienced people are easy to be fooled by the market, because they are shortsighted.
Short time is more suitable for experienced, time-rich and psychologically sound traders.
Time cycle is longer, although will miss some opportunities, but more accurate grasp the market.
One hour or four hour cycles are recommended for beginners.
But in actual trading, a more advanced approach is to use multiple time frames.
With multiple time frames, large and small time period conflicts are a common phenomenon.
For example, a daily chart gives a buy signal and 15 minutes later may give a sell signal.
How do you tell?
Use time frames, large periods to see the direction, small periods to see the position.
It is recommended to use two to three time periods, and the size of the combination.
Too much can’t be done, and it’s easy to distract yourself from making decisions.
Choose your preferred time period, for example 1 hour, then use a larger time period of 4 hours to determine the market trend and a smaller time period of 15M to verify the entry position.
Commonly used combination of time periods :(1M, 5M, 30M)(5M, 30M, 4H)(15M, 1H, 4H)(1H, 4H, 1D)(4H, 1D, 1W) usually, there is about a 5-fold relationship between adjacent size time periods.
For example, if (15M, 1H, 4H) time periods are used, the general analysis methods are as follows: First, under the 4H period, trend indicators such as MA, Bollywood band and trendline channel are used to analyze the overall market trend;
Then, during the 1H period, use shock indicators such as RSI, KDJ and support resistance levels to determine the entry zone and find stop-loss and stop-gain levels.
Finally, under the 15M cycle, the K-line diagram is used to verify whether the support resistance is effective, and the approach position is selected and the operation is executed.
Your final decision is completed in 1H cycle, but the trading operation is completed in 15M cycle.
The ups and downs of the pandemic dented risk appetite, the dollar strengthened gold fell, and oil prices fell more than 2%.
Please pay attention to the specific operation, the market is changing rapidly, investment needs to be cautious, the operation strategy is for reference only.
