News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
EUR/USD
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Oil - US Crude
Bullish
Wall Street
Bearish
Gold
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
GBP/USD
Bearish
USD/JPY
Mixed
More View more
Real Time News
  • Get your snapshot update of the of relative currency strength and exchange status from around the globe here: https://t.co/H19vRDCpUJ https://t.co/HCvzbjEkr6
  • Get our analysts’ view on the key fundamentals for indices in Q2. Download now. https://t.co/Etdyanp76f https://t.co/n2wxfyMsJt
  • The Spinning Top candlestick pattern forms part of the vast Japanese candlestick repertoire with its own distinct features. Gain a better understanding of the spinning top candlestick here: https://t.co/DWm7cBMUg9 https://t.co/5KaUvfGM4I
  • There’s a strong correlation between interest rates and forex trading. Forex is ruled by many variables, but the interest rate of the currency is the fundamental factor that prevails above them all. Learn how interest rates impact currency markets here: https://t.co/J0EPMD2Cfi https://t.co/9Bjkh5413e
  • Many people are attracted to forex trading due to the amount of leverage that brokers provide. Leverage allows traders to gain more exposure in financial markets than what they are required to pay for. Learn about FX leverage here: https://t.co/BdgFmkRxVw https://t.co/FqAsp91Gia
  • A currency carry trade involves borrowing a low-yielding currency in order to buy a higher yielding currency in an attempt to profit from the interest rate differential. Find out if the carry trade suits your trading style here: https://t.co/7t4BzmLg8w https://t.co/cKOUmtj7Dj
  • GDP (Gross Domestic Product) economic data is deemed highly significant in the forex market. GDP figures are used as an indicator by fundamentalists to gauge the overall health and potential growth of a country. Learn use GDP data to your advantage here: https://t.co/Yl9vM7kO6a https://t.co/TnL91f7sl7
  • Human error in the forex market is common and often leads to familiar trading mistakes. These trading mistakes crop up particularly with novice traders on a regular basis. Learn about the top ten trading mistakes and how you can avoid them here: https://t.co/i8E2AXtzF3 https://t.co/cDcjl3Ue09
  • Consolidation or bull flag? A bull flag is a continuation pattern that occurs as a brief pause in the trend following a strong price move higher. Learn how to better spot these formations here: https://t.co/yOEvLjKnct https://t.co/KWOX5wSipe
  • What is your forex trading style? Take the quiz and find out: https://t.co/YY3ePTpzSI https://t.co/cwSWCpKtaj
The Definitive Guide to Scalping, Part 3: Time Frames

The Definitive Guide to Scalping, Part 3: Time Frames

Walker England, Forex Trading Instructor

Talking Points

  • It should be a top priority to determine the appropriate chart for your trading.
  • Reference a specific date range to begin your analytics
  • Finalize your execution by moving to a shorter term timeframe

One of the most frequent concerns voiced by new Forex scalpers is how to identify which timeframe and charts to use in their analysis. This question is often addressed after selecting a currency pair for scalping, and makes sense because the possibilities are almost limitless. The image below includes 12 different time frame charts for the EURUSD. If all of these possibilities seem overwhelming, don’t worry you’re not alone.

To help simplify this process today we will look at charts for scalping, and how to identify the appropriate timeframe for our selected strategy.

Learn Forex – EUR/USD and Time Frames

The Definitive Guide to Scalping, Part 3: Time Frames

A Frame of Reference

Whether you are a position trader or scalper it is always good to begin your charting with a frame of reference. A frame of reference is specifically looking at how much data is displayed on your chart. This reference is designed for scalpers to find the short term trend while identifying key levels of support and resistance. Think of it this way, scalpers looking for 10 pip gains would be ill advised to begin looking at multi-year graphs on a daily chart to begin their analysis. So what reference point and what timeframe charts should a scalper use?

Scalpers can begin by referencing 7 days’ worth of data. This allows the trader to take in exactly one weeks’ worth of pricing to establish short term market direction. Traders can then identify market swings and key levels of support and resistance for the week without getting analysis paralysis from having too many candles on their charting screen.

Below we can see two EUR/USD charts, both looking at one weeks’ worth of data. Notice how we can easily identify the trend on both graphs? Once this frame is selected, the time frame chosen simply denotes the number of bars displayed for the period selected. I find that a 30minute is a great place to begin, while traders wanting fewer bars may opt for a 2Hour or 1Hour selection.

Learn Forex – EUR/USD Weekly Reference

The Definitive Guide to Scalping, Part 3: Time Frames

(Chart Prepared by Walker England)

The Execution Chart

Now that you have narrowed down the trend, it’s time to consider an execution chart. This graph should be the final chart that you use in accordance to your scalping trading plan. While this chart may be the reference chart mentioned above, more often than not, scalpers prefer moving into shorter time frames at this point. This can aid in identifying intraday trading opportunities, and is most commonly called multi time frame analysis.

The final question you must ask yourself as a scalper is how many positions you wish to take in one day. While this answer will vary from trader to trader, normally in my experience the answer tends to fall in the 1 to 5 trade range. If you are looking to take 1-2 positions a day, I would recommend starting off with a 30 or 15 min chart. Traders looking for 3-5 positions a day can begin by looking for entries on a 5minute graph. Finally traders looking for 5 or more trades may be best served by consulting a 1 minute graph.

Of course everything is customizable when it comes to trading! My final recommendation is to find what works for you. Below is an example of a trade taken today, based off of a 5minute strategy. Join me for next week’s article for our Forex scalping guide as we look at different ways to determine support and resistance.

Learn Forex – EURUSD 5Minute Execution

The Definitive Guide to Scalping, Part 3: Time Frames

(Chart Prepared by Walker England)

Did you miss one of the earlier editions of The Definitive Guide to Scalping? Catch up on all of the action with the previous articles linked below.

The Definitive Guide to Scalping, Part 1: Market Conditions

The Definitive Guide to Scalping, Part2: Currency Pairs

The Definitive Guide to Scalping, Part 3: Time Frames

The Definitive Guide to Scalping, Part4: Support & Resistance

The Definitive Guide to Scalping, Part5: Scalping Ranges

The Definitive Guide to Scalping, Part6: Scalping Retracements

The Definitive Guide to Scalping, Part7: Scalping Breakouts

The Definitive Guide to Scalping, Part8: Risk Management

---Written by Walker England, Trading Instructor

To contact Walker, email WEngland@DailyFX.com

Follow me on Twitter @WEnglandFX.

To Receive Walkers’ analysis directly via email, please SIGN UP HERE

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES