Graphical trading charts can be based on a wide range of time frames or even on non-time-related parameters. For instance, the number of trades or price ranges.
With a basically unending number of choices, choosing the best time frame or another variable for a specific trading style and type of asset can seem to be an overwhelming task. If you are trading smartly, it actually becomes a very simple task.
How Novice Traders Choose a Time Frame
Numerous novice traders go through days, weeks, or even months attempting each conceivable time frame or parameter trying to locate the one that makes their trading profitable. They attempt 30-second charts, five-minute charts, and so on. Afterward, they attempt all of the non-time based options, including ticks and volume.
When none of them makes a profit, they think they made an incorrect choice and try them all again. It assumes they must have missed something.
How Professional Traders Choose a Time Frame
Professional traders go through around 30 seconds picking time frame. It’s because of their choice of the time frame isn’t based on their trading system or technique. In addition to it, the market they’re trading and their own personality.
For instance, traders who tend to make numerous traders all through the trading day might choose a shorter time frame. While traders who commonly make one or two trades per trading might choose a longer time frame. Traders may likewise switch their time frame on a given day relying upon how effectively they’re trading.
An Irrelevance Time
When evaluating a certain time frame with regard to your trading method, a price pattern that has significance on a two-minute chart will also have significance on a two-hour chart. Otherwise, it is not a relevant pattern.
As illustrated above, if your trading system doesn’t work well, so the fault is with your trading system or technique.
Other Trading Parameters
All in all, trading parameters that are not based on time should generally be used only with trading systems that are specifically designed to use them.
For example, if a trading system has been created using a 100-tick chart with a move occurring after 100 transactions have taken place. A 100-tick chart should be used. If a trading pattern is based on the size of a price move, then time isn’t important and you should select a chart, such as a Renko chart, that enables you to base the chart on price movement.
