There are a lot of factors that determine a trader to make better trades and become successful. One of the many things a trader can do is by understanding that currency pairs behavior and characteristics are diverse when they are seen in different timeframes.

There are a lot of factors that determine a trader to make better trades and become successful. One of the many things a trader can do is by understanding that currency pairs behavior and characteristics are diverse when they are seen in different timeframes.

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Market Moves In Different Timeframes

There is one thing traders should do, that is to know the behavior and characteristics of a market where they trade in different time frames. There are some pairs that tend to move for 3 to 5 days, closing on their highs or lows. After that, they stop for 1 or 2 days before continuing back on their trends. Intraday (for day trader), there are moves that last about 45 minutes with counterwaves lasting 15 minutes. When trader is looking at 60-minute charts, they tend to follow through to the next day. Some pairs have a tendency to gap overnight more than others do. Some pairs will have big spreads, while others are tight.

Every pairs are different, but as traders gets to know the pairs they traded, they will see patterns over and over in each time frame that will help them to time their trades. There are some pairs that may have great long-term charts but are not suitable for a trader that try to look at them in a lower time frame. Some pairs can't be traded with a 5-minute chart, while some make for great trading.

Let's say EURUSD and GBPUSD pair. I feel comfortable trading these pairs for very short term moves. They have incredible volume and are so active that in a single day these pairs can move up to hundred pips. It takes a while to get to know a certain pair behavior, but make it one of your goals to learn how they act and you will trade them better.

 

Becoming A Better Trader

Becoming a better trader means being able to look at the market from many viewpoints. Focusing on one time frame will narrow your view and opinion of the market. Therefore, it is important to get a bigger picture of the market. Successful traders are they who know what the market is doing, not just at the current moment but in all their time frames.

Short-term traders or day traders (like me) shouldn't make all the decisions by using 1- and 5-minute charts only, and position traders need to look at more than just daily charts. Whether day traders or position traders, they should always be looking at many different time frames. I find it best to use at least three time frames for day trading: the daily chart to get an overall picture of the trend, the hourly chart to see any trading opportunity, and then the 5-minute or 15-minute for entry. If you have a trading opportunity that is on a small time frame and you get a signal on a longer time frame as well, then that is a good time to trade.

So remember, always look at more than one time frame. Check other time frames especially higher time frames. It will help you to determine the price movement and overall trend.

Hope this article helps!

Good luck.
Rico FY