| Many of the large Forex Brokers that novices use | | | | can be more vulnerable to sudden sharp reversals |
| release technical analysis and recommended entry | | | | which can be a serious problem. |
| and exit points for most currency pairs on a daily | | | | Very short time frames below 10 minutes do not |
| basis. Many beginners resort to relying on this option | | | | lend themselves to most types of statistical analysis |
| soon after they commence trading once they realise | | | | but some traders do use them for other types of |
| the limits of their own Forex knowledge and | | | | trading strategies and analysis such as Scalping. |
| capabilities. | | | | The main concept used by scalping is to minimize risk |
| You can use technical analysis to help you analyze | | | | by entering and exiting trades as quickly as possible. |
| Forex positions in order to detect new trading | | | | You will then need to repeat this process a large |
| opportunities. However, if you do so, one of the first | | | | number of times targeting for a small gain at low risk |
| and most fundamental features you must determine | | | | each time. |
| is the size of time frame that you will use. | | | | One of the main ideas of this strategy is to attack |
| You also need to realise that the statistical methods | | | | the markets during their off hours when they have |
| used in technical analysis perform much better and | | | | settled into a tight predictable range pattern. |
| are far more reliable using time frames longer than | | | | A good time period for scalping this way is between |
| one hour. | | | | 9.00pm and 1.00am GMT and only the following |
| Many newbies attempt to detect technical | | | | currency pairs are traded: EUR/GBP, EUR/CHF, GBP |
| formations such as double tops, head and shoulder, | | | | CHF and USD/CAD. You will find that Forex can be |
| triangle break outs etc using 1, 5, 10 or 15 minute | | | | very quiet with low volatility because the USA, |
| time frame. However, this is not a good practice as | | | | Canada, Europe, UK and Switzerland do not release |
| the statistical techniques are unreliable with these | | | | important fundamental data during this time period. |
| short time frames. | | | | Forex Analysis is used to design Forex Trading |
| So which are the best time intervals to use? There | | | | Systems and consists of two elements which are |
| are a large number of times frames that can be | | | | Fundamental analysis and Technical analysis. Are there |
| chosen when analyzing the Forex Market using | | | | times when one supersedes the other? Yes, there |
| Statistical Techniques. The most popular timeframes | | | | are because the releases of highly important |
| used are the hour and the day ones. | | | | Fundamental data can be very dramatic events and |
| If you have already developed a trading strategy | | | | technical analysis is of very limited use during these |
| based on a selected time frame then stick with it. | | | | times. |
| Otherwise, here are some guidelines that you may | | | | If you are a newbie to Forex my advice to you is to |
| find of use. | | | | get a mentor / teacher to help and guide you. |
| Fundamentally, statistics produce more reliable results | | | | However, make sure they have a good track record |
| the longer the time frame used. This is especially so | | | | and publish regular results. You also need to make |
| when the trading is following a regular patterns such | | | | sure that they trade for a living themselves and on a |
| as during stable times. However, longer time frames | | | | regular basis. |