Picking the right forex trading strategy is key to earning consistent profits from the forex market and there are plenty of different factors which go into creating the right trading strategy. As you start to research into forex trading strategies you will discover that there are many strategies out there which can all be profitable. It is important to select or create one which fits your own trading style as any strategy can be wrong if it is not suitable for the individual trader.
One of the components for a successful trading strategy is selecting the proper timeframe. A specific strategy will only work on the timeframe it was created on and applying the strategy on a different timeframe will not yield the same results and in the worst case cause heavy losses. Many new traders often make the mistake to apply the same strategy from timeframe to timeframe and jump back and forth. This is a terrible mistake which should be avoided.
What is the biggest difference between timeframes? Different timeframes will create different trading signals. For example you can take a look at the D1 timeframe and find a buy signal, but if you look at the M5 timeframe you will see a sell signal. This is the biggest reason why a trading strategy which has been created on one timeframe, for example on the H4, should not be used at a different timeframe, for example the M15. Forex traders who wish to trade different timeframes should create different trading strategies for each of them.
What is the biggest benefit and drawback of shorter timeframes in comparison to longer time frames? The biggest benefit is that the shorter the timeframe is the more trading signals will be created, but the biggest drawback is that the signals will be less accurate. On the other hand a longer timeframe will yield less trading signals, but more accurate ones. It all depends on the trading strategy. For example a scalper needs a short timeframe and will create a trading strategy based on that where other strategies are designed for longer time frames.
After you opened your forex trading account with Paxforex the next step is to download the trading platform MT4. Once you have done so and you are logged in you will see that MT4 offers nine different timeframes: M1,M5,M15,M30,H1,H4,D1,W1,MN. Those nine are the most standard timeframes and should suit the majority of forex traders from retail to professional trades. You can easily select your time frame by clicking on the corresponding menu button.