For a long time, Forex traders have been focusing exclusively on short-term fluctuations in the market and spending a huge chunk of their time watching charts, all in the attempt to profit from the market. These kinds of traders trade in this manner as it is believed to be the best way to make gains. Nothing, however, could be further from the truth. Those traders who steer away from higher time frames often do so because they seem overwhelming to them (obviously from the outside). Higher time frames are anything that is above the 4 Hour Chart and below are reasons why traders should start embracing higher time frames.
Higher Time Frames Are More Accurate As Compared To Lower Ones
Trading with higher time frames means that an operator enjoys accuracy as a perk. A majority of Forex traders would rather be patient with a trade that is on the 12 Hour Chart than try catching a deal on the 1 Hour Chart with a greater chance of being a loss. Higher time frame candles are also more reliable as it shows the trade the price action for a larger period. Higher time frames make overall market sentiments clearer than if a trader was using a lower time frame. Such accuracy assures dealers of massive gains especially if they are using trading signals that are ‘battle proven.’
Higher Time Frames Negate ‘Market Noise.’
‘Market Noise’ refers to the rapid price movement that is typical of lower time-frame charts. It is common for novice traders to see a sea of opportunities when they observe this fast price movement. The reality, however, is that these precise price changes occur so quickly that an average trader doesn’t get a clear picture of the overall sentiment in the market. For instance, you can observe at the hourly or 5-minute chart and get a front-row view of the price action for the day. From this vantage point, one can watch a lot of price movement with some of the candles ostensibly showing great set-ups. Higher time frames thus help us to view the overall market sentiment clearly and show what price has done what over a larger span of time, essentially making it more accurate.
Trading With Higher Time Frames Is Less Stressful For The Traders Than Shorter Ones
Those individuals who have ever traded the lower time frames can attest to how they are constantly on the edge. Candles here change so often that one has to keep on analyzing them for hours on end, all in a short space of time. It is quite stressful for a trader to function optimally in such an environment and this may consequently lead to poor judgment in their trading, eventually leading to emotional trading. Conversely, trading should be calm and relaxed. The last thing you would want to do is begin a trade when stressed. Emotional trading has led to a loss of actual funds on many occasions. Trading with higher time frames means that a trader experiences less stress, giving them more time to come up with plans on how to execute and manage their trades.
Offers An Opportunity To Step Away From The Personal Computer (P.C) Screen
Traders have time and again been complaining about how it is difficult to trade in the Forex market and still continue living their lives. Most of you who have been trading the lower time frames know how demanding they can be, requiring one to sit in front of the Personal Screen (P.C) for long periods. Trading Forex is enjoyable only for those who are able to trade in the market and still get an opportunity to live their lives at the same time. This sheer fulfillment can only be by trading the higher time frame charts (mainly the 8 Hour, 12 Hour and the Daily Chart). A trader will only be required to check their charts a few times in a day. Patience in the trade grows, which then means that they only wait for the best possible opportunities. Order Unique Answer Now