Risk Warning: Margin trading involves a high level of risk, and may not be suitable for all investors. A rule of thumb is the ratio of 1:4 or 1:6, which commonly refers to 15-minute and 10-minute time frames respectively. Long-term trends are spotted by using larger time frames, while opportunities to enter the market come when short-term frames are put into use. MTF, or multiple time frame analysis, is the method most widely utilized by forex traders to understand the overall price movement of a currency pair. Fret not, for this is but one of the ways to approach the situation at hand. Then, you have another question – “Do I choose the currency and trade based on its activity or do I choose the currency based on the time frame?”. The 15-hour difference between the two endpoints results in only a short period of downtime between the closing time of one and the opening time of the other. Starting from Sydney, at 10 PM (UTC) on Sunday, the market opens and works all the way until the closing time of the New York session, at 10 PM on Friday. The nature of the forex market allows traders to go long or short 24 hours a day without almost any stops during the week. Despite trading times being from Monday-Friday, the time zone differences across the globe mean this extends further.įour major trading sessions – Sydney, Tokyo, London, and New York, account for nearly 75% of the daily trading volume in foreign exchanges. They refer to the average period of time needed for a certain criteria to be met in order to initiate an automated transaction that requires no additional input on the trader’s end. The keywords used to describe their time frames are trigger and trend. Trigger time frames are shorter than trend time frames. Based on the three types of time frames mentioned previously, a few approaches stand out. In Forex as well, traders sometimes pick their strategies depending on the time at which they wish to trade. Time is often the reason we make certain decisions in our lives. Each time frame has its purpose – longer ones are useful for identifying trends, short ones help pick a good time to enter a trade, and medium ones strike a good balance between the other two. All three can be incorporated to analyze potential trades. Generally, there are three kinds of time frames – short-term, medium-term, and long-term. However, switching between different time frames can also be beneficial.Ī trading strategy’s effectiveness is often influenced by the time at which it is executed. The more consistent you are, the more you will know about trends in that time frame. Understanding Forex time frames means gaining clear visibility over currency pair price movements during specific times of the day, night, week, month, year. Traders need to be aware of their goals in order to choose which trading times work for their strategies.

In Forex trading, time frames are closely linked to your strategy while providing a view over larger trends.

New york session forex time