The best times to operate

One of the most important concepts, without which it is impossible to operate, is temporality. Let’s learn about temporality and how to use it. After reading this article, you will also learn how to use several of them simultaneously when trading, which can increase the efficiency of your trading system significantly.

What is a temporality?

The temporality is the period of price movement.

For example, if the time frame is 5 minutes, it means that you will be able to see how the price changes

 

To operate successfully, you must first select the time frame in which you will use your strategy and which will receive signals from the trading system to open or close operations.

This is called work temporality.

It should be noted immediately that the following rules apply when selecting a temporality:

The longer the time selected, the greater the precision of the signals and the lower the risks.

The shorter the selected time period, the lower the precision and the greater the risks.

At higher times, the price trend is always stronger than at lower times. For example, if the price is moving up on the daily time frame (bullish trend) and down on the four-hour time frame of the same asset (bearish trend), then the bullish trend will still be stronger than the bearish one.

What are the main Forex temporalities?

The key time frames in Forex are 1 minute, 5 minutes, 15 minutes, 30 minutes, 1 hour, 4 hours, 1 day, 1 week and 1 month.

Each subsequent temporality is the oldest with respect to the previous ones.

Each previous temporality is the youngest with respect to the following ones.

In general, temporalities are conventionally divided into the following groups: low, medium and high.

The low time frames are 1, 5 and 15 minutes.

The average times are 30 minutes, 1 hour and 4 hours.

The high temporalities are 1 day, 1 week and 1 month.

When analyzing low temporalities, we examine the short-term behavior of an asset’s price; By looking at the medium temporalities, we examine the medium-term trend, and by analyzing the high temporalities, we see the long-term trend.

What is the best time to operate?

Just as there is no best strategy to operate, there is no best timing either.

The choice of a temporality depends only on the subjective preferences of the trader: his temperament, the trading strategy he has chosen and the asset he is going to trade. In the market it may happen that some strategies that work in low time frames do not work well in medium or high time frames, and vice versa. But the market is changing. It may also happen that the selected strategy stops working on the asset or the chosen time frame. Then the trader must decide whether to modify the strategy, change the timing or abandon the analysis of that specific asset.

The best timing for scalping

Traders who operate at lower time frames are called scalpers.

Scalping is the riskiest approach to trading and certainly means making the biggest profits.

Scalpers try to earn on very short periods of price movement and often open and close large amounts of trades.

In our opinion, the best time frame for scalping is not 1 minute, but 5 minutes. Scalping in 1 minute is too risky.

The best timing for intraday trading

 

Day trading is a style in which trades are opened and closed within one trading day. Those who use this style are called day traders. These people use, above all, medium temporalities, of which the most optimal is 1
hour.

Day traders take less risk than scalpers, and they never trade from one day to the next.

The best timing for swing trading

Swing trading consists of operating within a period of 1 week. Swing traders try to capture intraweek price movements. Hence their temporalities are medium and high. The optimal time frames for swing trading are 4 hours and 1 day.

The best timing for position trading

Position trading involves the use of higher time frames.

This is the longest approach in trading.

Operations remain open for several weeks and sometimes for several months.

In this case, the optimal time frames are 1 day and 1 week.

Analysis of multiple temporalities

Let’s now see how to increase the effectiveness of any trading system by using several temporalities simultaneously.

Alexander Elder, a well-known technical analyst, suggested a three-screen system in which two temporalities must be used at the same time to make a balanced decision. The first temporality is work. In it, the decision is made to open or close a position.

The second temporality is verification. It is the closest to the work area. Elder proposed to find the check time by multiplying the work time by 3, 4 or 5. For example, for a work time of 1 hour, the check time would be 1 hour*4=4 hours. For a temporality of 1 day, the verification temporality would be 1day*5=1 week. Thus, each trading style will have its testing time or, as it is often called, its trend time.

The basic principle of using two temporalities is that, when opening a trade, the trends of both should not contradict each other.

For example, we are trading in the trend and we will open an upward trade on the H1 time frame. In this case, in time frame H4, the trend must also be bullish. If the trend is bearish, it is better to avoid opening the trade.

Similarly, let’s assume that the swing trader opens a downward trade in time D1, trading in the direction of the current trend. In this case, the trend must be bearish in the trend time frame W1.

Conclusion

Choosing and using a timing correctly is the most essential part of any trading system.

Time frames provide very valuable information about where the price can go and, therefore, are of great help to the trader.