Selecting Time Intervals In Forex Charts

November 28, 2011 by Leo D. Endo  
Filed under Finance

Nearly every trading platform in the foreign exchange market offers Forex charts. In most instances, these charts are customizable so that you can pick and choose which elements of the market you want to study or track. Most charts can be set up to show several different time intervals. The intervals may be as close together as every trade. Other intervals are as long as weeks or months.

Traders know that within a small or large time interval, the prices of a currency pair are likely to fluctuate in a wave motion. The waves may be small during 30 second charts and may be much larger if the chart is expressed in a 30 minute time interval. Looking at the charts for the various time intervals will tell you the true pattern of the pair price.

If you are watching a currency pair such as the U. S. Dollar and Euro on a five second chart, the price may be moving within a relatively narrow range, but in an upward direction. The same pair viewed on a five minute chart may show that prices are nearing the bottom of recent transaction prices. When you understand this concept, it helps make your trading decisions more structured.

You could sell the pair and plan on buying it back within a matters of seconds. On the other hand, you could buy the pair and wait for the price of the pair to move upward in a somewhat longer time frame. Some traders do not make a buy or sell decision unless at least three of the time indicators are showing signs of a reversal in trend.

When you have a sparsely traded pair, it is more likely that you will use a longer time interval in order to watch trends. When the trade is interested in a currency pair that moves more slowly, holding the pair for a longer period is a likelihood. You should be aware of which time interval you are watching so that you can utilize optimum timing for profit purposes.

Another feature of the Forex market is that it is available for trades from late Sunday afternoon until late Friday afternoons in the United States. The market doesn’t shut down during that time period. You can usually see peak volumes during business hours of the major financial centers of the world. Currently these are in Australia, Japan, London and the United States.

Time intervals for Forex charts are an important tool for traders. You should make sure your trading platform allows you time options to view. Identify the direction and speed of chart movements for optimum trading decisions.

It can be inconsiderably confusing at times listening to various currency news trading all at once. There can be a huge magnitude of forex broker review sources you can read, but pick the reputable one.

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