What timeframe to choose – timeframe indicators
What is Forex timeframe? Which timeframe is better to trade? How to choose a timeframe in MT4? How to do timeframe analysis? What are the timeframe indicators? The answers to these questions you get in this review.
Good evening traders! Today, you will know what timeframe Forex which timeframe to choose for trading through your strategy, learn how to predict price based on the higher timeframes and also can download the indicators and timeframe that will allow you to quickly and correctly make decisions in trading.
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What is the timeframe on Forex?
As you already know from our past articles candlesticks and bars on the chart show the change of the currency pair by four parameters:
- Open price;
- Close price;
- Maximum price;
- Minimum price for a certain period of time.
Such intervals are called timeframes. In the trading terminal MetaTrader 4 the following timeframes:
- one-minute timeframe (M1);
- 5-minute timeframe (M5);
- 15-minute timeframe (M15);
- 30-minute timeframe (M30);
- hour timeframe (H1);
- 4-hour timeframe (H4);
- daily timeframe (D1);
- weekly timeframe (W1);
- monthly timeframe (MN).
Thus, minute timeframe time period each bar on the chart is one minute, 5-minute timeframe five minute time frame – one hour, on the daily timeframe – one day, etc. Set of candles one timeframe is a graph of the price movement of a currency pair, and the graph is usually called the minutes chart, hour, day etc.
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What timeframe to choose?
The choice of timeframe depends on your trading style in Forex. If you prefer intraday trading (also referred to as "intraday" or "day trading") where all open trades are closed the same day, work timeframes will be from one minute (M1) to the hour timeframe (H1). Position traders who prefer long term trade choose timeframes from 4-hour (H4) to daily (D1), and sometimes higher.
Bigger timeframes needed to analyze long-term market trends for long period of time. Regardless of what strategy you trade, every morning you should start with an analysis timeframes. If your work timeframe is the time period from M1 to H1, you must first assess the situation on the daily chart then go to the 4-hour timeframe, and then look for signals in your timeframe. For example, if D1 and H4 are now seeing the upward trend, it is not necessary to open sales in H1.
If you trade H4 or D1, the first step is to pay attention to higher timeframe, i.e. weekly or monthly.
During the analysis of the time frames you can analyze the market movement in the long, medium and short term. So a chart based on minute candle shows the dynamics of changes in prices of about 4 hours, 5-minute candles – 1 day, 15-minute candle to light for 2.5 days, on the hourly candles for 10 days, on the 4-hour candles in 2 months, on weekly candles for 5 years, and monthly over 20 years.
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Which timeframe is better to trade?
If you are a novice trader then we highly recommend you to trade solely on the daily timeframe. On a long-term time periods less about price movements, the so-called "noise", which is born from different market gossip. So on the daily charts clearly distinguishable candlestick patterns, trend lines and levels of support / resistance. On the daily chart you rarely need to enter transactions, but these transactions are the most accurate, and your emotions will be under control. Thus the profit on one deal will cover all of your monthly income, if the trading on the minute charts.
Profitable trade on lower timeframes is a sign of excellence. If you enter a trade on the minute charts after careful analysis on higher timeframes you can open a position with minimum stop-loss and large take profit. But this is achieved only by professional traders after years of practice in Forex trading.
Indicators timeframes in MT4
To be aware of all the trends on the higher timeframes and not to clutter the terminal with lots of charts, indicators were established higher timeframes. For example, the MiniCharts indicator in one window displays multiple miniature charts different timeframes. This is very convenient when you need to monitor the status of the higher timeframe trend. The MiniCharts indicator also allows you to configure in one window is not only a different timeframe and different currency pairs. To correctly display the MiniCharts indicator to MT4 trading terminal, you should install the font file that is in the archive along with the indicator.
There is another useful tool to display a timeframe on a single chart – the indicator Mcandle. His work is somewhat different from the MiniCharts indicator. It draws candlesticks of a larger timeframe on top of your main chart with younger timeframe, as in the screenshot below.
For example, if you are trading 5-minute timeframe and you want to simultaneously display the hour timeframe in the indicator settings Mcandle in front of the TFbar option, specify a value in minutes, i.e. 60 (for H4 is 240, for D1 – 1440, etc.).
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Now you know on what timeframes to trade and how to analyze timeframes for older time periods, and what are the indicators timeframes.
Download indicator MiniCharts
Download indicator Mcandle
Read also the article "What is the minimum amount to start Forex trading?".