The Best Trading Time Frame

What is the best chart time frame for trading and tape reading? Great news, there isn’t any one time frame that’s necessarily “the best”.

Like Einstein said, it’s all relative (though I don’t think he has ever once touched a trade).

The best chart time frame you should be studying depends on the style of your approach and how long you typically want to hold a trade open. In my case, I study multiple time frames but my core time frame is the 4-hour. This means that I look for trade setups developing on the 4-hour chart and use other time frames (larger and smaller) to  make sure I’m trading with the macro-trend and fine-tuning the timing of my entry relative the 4-hour respectively.

For example, when trading FX I typically expect for my positions to work out one way or another within a few hours up to as much as a couple of days or so. This is all relative to how long moves take to develop on my 4-hour time frame. So, if it takes 6 four-hour bars on the chart for my trade to develop that’s 24-hours worth of time passing of me holding onto a trade. Six bars on a chart regardless of time frame is not very much data…again, it’s all relative.

The cool reality of this is that you can find setups on any time frame. For example, if you look for a break out move to develop on a 1-minute chart then that means you’ll typically be holding onto the position for several minutes to maybe up to an hour at a time. On the other hand, if you look for moves on a Daily chart then you’ll be holding onto trades for days up to weeks at a time. In both cases, you can make money as long as you’ve done the right analysis relative to that time frame.

I prefer the 4-hour time frame in FX because it’s slow enough to not be hyperactive trading but setups happen often enough each week to keep me interested/engaged. The lifestyle I like is being able to have free-time to do what I want. So, not being tied down to my computer every minute of the day monitoring trades or the market is more of my preference. Anyway, I have a completely mobile setup so I could take my laptop with me and trade outside my home if I need or want to from pretty much anywhere as long as I have a signal for my cell phone.

Feel free to share your insights on this or ask any questions you might have by using the comment section below this post.