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Thread: The Importance of Trading Time Frame Assessment

  1. #1
    FxIndia Administrator Invest_Master's Avatar
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    Apr 2007
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    Default The Importance of Trading Time Frame Assessment

    By John Forman , Anduril, Inc.

    Trading requires time in a couple of ways. The first is the time dedicated to developing a trading system. This can be thought of as a one-off thing, but in reality it is more an on-going process. Once a system is in place, time is required in terms of monitoring the markets for signals, executing transactions, and managing positions. How much time all these different elements require depends on the trading system. The trading system, in turn, needs to take in to account the amount of time the trader has available.

    With that in mind, the first question to be answered is how much time each day/week/month (whichever is most appropriate) can you dedicate to the various requirements of trading and managing a trading system? Different trading styles require different time focus. As a rule, the shorter-term the trading, the more specifically dedicated time required. A day trader, for example, runs positions which are opened and closed during the same session. This normally means a lot of time spent watching the market for entry and exit signals. An intermediate or longer-term trader who holds trades for weeks or more does not have to dedicate the same amount of time to watching the markets. He or she can usually get away with only spot checking from time to time. Of course there is a whole array of possibilities in between.

    At this point it is also important to consider distractions. There is a major difference between having 6 hours per day of uninterrupted time to watch the markets and having 6 hours of time during which you will be making and receiving phone calls, having meetings, and otherwise not being able to focus on the markets and make trades when required. In the former case one could day trade. In the latter, however, day trading would probably be a disaster as the trader would most likely miss important trading situations on a frequent basis. This sort of thing needs to be taken in to account.

    The basic decision one has to make is in what timeframe the trader can reasonably expect to operate on a consistent basis. The individual must be able to do all the data gathering, research, market analysis, trade execution and monitoring, portfolio management, and any other functions required of her or his trading system. That means a trading timeframe has to be selected which allows the trader to handle all of these duties without the kinds of disruptions which can cause poor system input from the user, and therefore poor system performance.

  2. #2
    In Profit
    Join Date
    Jul 2007
    Thanked 1 Time in 1 Post


    You will need to analyze if the pair's range is worth for scalping or not. If so, then decide how many pips target can she gives you in intraday movement, and so is the risk management.
    Not all pairs will work the same in just one type of time frame. Some pairs will do good only in Daily above, some can be traded in 4H to 30M, some still be considerable for scalping for 30M below.
    So make a research on your lovely pair and go with the result.

  3. #3
    Join Date
    Jul 2007
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    Yes I have noticed same thing in demo account.

    I opened demo $25 just to see and I realised some currencies fluctuate a lot and this is not good for $25 starting to scalp.

    One must find a currency that has low range. then scalping can be more safe.

  4. #4
    Join Date
    Jan 2008
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    You have made you point Mr. Maxpips, Identifying the time frame is according to individual personalty, some like to make just some trades a month and go for bigger time frames and some goes with shorter time frames to just scalmp few pips everyday.

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