Swing Trading - Which Time Frames Are The Best To Trade?
Just what is the best time frame to swing trade
? With the advent of computers, there are now a seemingly endless number of time frames that a trader has available to them. There are a lot of time frames you could swing trade with, but can you get an edge by using one or two over others? Do some time frames offer higher risk with less reward? The answer to these questions is a definite yes. If you are new to swing trading or just trading in general, consider trading only the four hour to daily time frames. It is these time frames that offer the highest reward with lowest risk for trading in general. These time frames can also be used to trade with regardless of the market you trade.Many new traders are drawn to 1 - 15 minute time frames like bees to honey. The extremely fast pace these time frames move at is almost irresistible for some people. Why are these time frames so popular? It is typically believed that since these time frames move so fast, that making money or placing profitable trades is simple and can be done without much effort. This couldn't be further from the truth. Trading time frames below the four hour is extremely risky. The lower a trader goes the higher the risk a trader is placing themselves and their trading capital at. While some traders are able to trade the 1 to 15 minute time frames profitably, the vast majority of traders who attempt to trade them usually burn themselves out after a short while and completely give up on their trading career.
The four hour to daily charts are the best to swing trade because they are high enough to remove market noise and risk but also short enough to allow you to spot and take advantage of trends before they change. As you go lower in time frames, the noise or market randomness increases. New traders always find these time frames extremely difficult to trade. The trend can be so hard to spot because of all the market noise. You can overcome this market noise problem by going up in time frames and only trading four hour and higher time frames. However, time frames higher than the daily do not have any added advantage over the four hour to daily and actually make trading more difficult instead of easier. Time frames higher than the daily chart can be useful to observe markets with but they aren't recommend to be used for trading. The main disadvantage of using time frames higher than the daily is that you would be waiting weeks to months before placing a trade and such large stop losses would need to be placed that massive trading capital would be required to make it profitable.
Swing trading can work on any time frame, but if you are starting out consider using the four hour to daily charts. The allure of quick and easy money trading lower time frames is difficult for many new traders to overcome but if you want to place yourself on the path to becoming a successful swing trader, you should only consider trading the higher time frames. You'll be able to see the main trend with much more ease and this will increase your win ratio significantly.
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