Question #3 on the Forex Q&A Podcast is a very common one.
“Which is the best time frame to trade Forex? I want the best chance of winning.”
— Thomas, Netherlands
There are lots of factors that go into whether or not your trade “wins”, but selecting the best time frame is certainly on the list.
Ask this question anywhere else, and you’ll get an answer that sounds something like this: “It really comes down to what your trading personality is. Try them all, and decide which is best for you.”
I could give a shit less what your “trading personality” is. You want to win, correct? So you want to make the most money in the shortest amount of time, like everyone else on the planet? Good, keep reading.
There are 4 major benefits to the time frame I’m going to mention.
WARNING: You may not like the answer I give, but regardless, I have some good news for you either way. So read all the way to the end.
Or you can just listen to the podcast where I answered this question here if you’d like.
The Best Time Frame to Trade Forex Is…..
The daily time frame. And it’s not even close.
Not the answer you wanted? Like I said, keep reading. Good news ahead.
I’m a professional, and I almost exclusively trade off of nothing but the daily charts. I don’t even look at other charts. I don’t need to. It’s pretty great.
It almost feels like I’m stealing. I put up the returns I put up, in 10-15 minutes a day, while hundreds of thousands of traders all over the world are tearing their hair out, over-caffeinating, taking drugs, not spending time with loved ones, not spending time on self, just to maybe eek out a profit.
Do I feel bad for those people? Nope. All of this is a choice. You can choose to have prosperity and freedom, or you can choose the opposite. I like my side much much better.
So let’s talk about why. Here are the benefits of trading Forex on the daily time frame over any other.
1 – Everything Works Better!
Done. End of blog post. Thanks for reading.
This phenomenon is true by the way. Remember, I’m the guy who has tested everything everywhere. Every single Forex indicator I tested out, was tested on every time frame (except for the 1 minute, because trading there is ridiculous).
I was constantly blown away by how much more accurate everything was on the Daily. It almost never failed.
The only times where it did fail was where an indicator was really bad to begin with, it may have worked a tiny bit better on a lower time frame, but was shitty and worthless overall, so it didn’t matter.
And yes, I have also tested out all of the price action tools that I make fun of, and even they are much more accurate on the daily time frame than they are anywhere else.
If you truly do care about making the highest returns possible, this is a great discovery. You now know where to best focus most of your time. Simple 80/20 principle.
Now that you know this, why on Earth would you waste time anywhere else?
Don’t worry, I already know the answers. One of them is what I refer to as the Satan of Forex trading — Instant Gratification. This land mine deserves its own blog post, and it’s going to get one, but I just want you to know that I’m well aware of this reason, and I hope you are too.
And if this applies to you, perhaps I can change your mind with these next few benefits.
2 – Seriously, you can trade 10-15 minutes a day and outperform almost everyone.
Most people value time over money these days, and proof is all around you. Food delivery services are at an all-time high. Uber became a multi-billion dollar company almost overnight. These companies don’t sell services — they sell time.
How valuable is your own time? If you’re trading the 15 minute chart, your answer is “My time is worth less than yours, VP”.
And that should not be your answer, because it’s not true.
Sure, if you’re a day-trader or a scalper, maybe you only spend 10-15 minutes a day actually making trades, but boy oh boy are you spending a lot of time waiting.
Price doesn’t automatically start moving as soon as the European session or the US session begins. And sometimes certain pairs, even very popular pairs, don’t move at all.
And there you are sitting. Waiting. Watching.
To make matters worse, as you well know if you’re a scalper, there are is a lot of misdirection and head-faking done by the Big Banks in the early parts of the sessions, and often you can get caught up in one.
And now you’ve taken a loss to start the session. What do you do now? You probably keep trading. Now the market owns you.
This was particularly hard for me living on Pacific Coast Time (GMT -8). I waited tables at night and I have no children, so it wasn’t the worst thing in the world, but staying up from Midnight to 6 AM was no way to live either.
Now, all I do is check in a half hour before the trading day ends at 2 PM my time, check my charts, decide if there’s anything to be done, execute, then my day is done and I can literally go do whatever I want for the rest of the day.
Have fun being a slave to the market. I choose otherwise.
And on top of all this, benefit number three is a great one:
3 – News Events No Longer Matter Much
Seriously, how bad is it when you’re day-trading and even the smaller, more insignificant news events have the ability to knock you out of your trade? Absolutely miserable.
It’s difficult enough keeping all of your charts in order, now you have to navigate through German construction data and speeches from some sub-chairman from the Bank of Canada.
Exactly how much do you hate yourself?
I can say all of this, because I used to be all of this. Never again. As soon as I started trading the Daily time frame 99% of the time, everything — results and quality of life both — went up tremendously.
One of the greatest benefits of the Daily chart is how the vast vast majority of news events don’t matter to you anymore.
There are really just a few news events, per pair, which you would even have to bother yourself with. This is a topic for another blog, but what I have done is recognized what these events are, and simply avoid them.
If Mario Draghi is speaking, I’m out of the Euro.
On the other hand, if it’s Non-Farm Payrolls day, I’m often out of the market altogether.
If there are smaller news events that do not go my way, this is almost always okay, because if the direction I’m trading is technically correct, price will correct itself over time, and often sooner than later.
I bolded it, which means I want you to read it again.
In Forex trading, technical analysis > fundamental analysis by a very large margin. Use this to your absolute advantage.
4 – Trading The Daily Time Frame Allows You To Zoom Out and See the Big Picture
So important. The old saying “too close to the forest, you can’t see the trees” is something that applies to so many Forex traders.
Ask yourself this — Would you rather be able to filter out the noise, or be surrounded by it?
If you chose the latter, know this — you’re giving up control — on purpose.
This is your money we’re talking about. Never give up control if you don’t have to.
If you’ve read/watched my material on the Big Banks, you already know what they do. But did you know they manipulate the market on the smaller time frames much more often than on the Daily time frames?
Why? Because that’s where most traders are!! Popularity syndrome, again. This is also why I’d be willing to bet a lot of technical analysis tools work better on the Daily charts — less fuckery from the banks.
Back away from the noise and stress. It’s a much better view.
The Good News You’ve Been Waiting For
I promised it, so here it is.
This blog post may have took the wind out of your sails a bit, because you actually enjoy trading on smaller time frames, or you feel like you have some sort of edge there.
Fine. Maybe you do. I’m not here to take that away from you (though I will try my best). So here are two pieces of good news you can take away from this.
1 – You Can Do Both!!
Double-dip if you want. Have one setting on your platform just for trading Daily charts, and scalp on another. If both work, why would you not just do both? Who says you only have to do one?
This way you can put yourself in the best position to win by trading the Daily charts, and continue to chase the dragon and feel the thrill of trading on smaller time frames.
If you’re profitable in both, for the love of God, do both!! I just want you to succeed and make lots of money in the end.
This method has an added bonus I think of showing you in real time which time frame is superior. Some pompous jerk on the internet may not be able to convince you to change your trading, but if you can see it happening right in front of you, you may have second thoughts.
2 – Everything I Do Here Works On Every Time Frame
Yes, even though you and I don’t even trade the same time frame, No Nonsense Forex is definitely for you as well.
A good indicator is a good indicator. A good technique is a good technique. A good system is a good system.
They just all perform better on the Daily time frame, that’s all.
What About the Weekly Time Frame?
So the obvious question may be arising here, “If longer time frames are better, wouldn’t the Weekly time frame be even better? What about the Monthly?”
First off, I didn’t say “Longer time frames are better”. Because it’s not true.
The biggest issues with the Weekly are how there are too many large news events contained inside of it. You can no longer avoid them. They can, and often do screw up your trade.
It used to be the 4 hr and 1 hr would out perform the Weekly chart in my testing, but this has changed in the last few years. I know why (particular indicator), but the results are the results. I would say the 4 hr is the next best after the Weekly, but it’s a pain in the ass to trade, and I don’t recommend it.
The Daily time frame is the best time frame to trade Forex and it’s not even close.
This blog and my YouTube channel and my Podcast are not designed to be shown to as many viewers as possible. Just the dedicated ones who seek stuff like this out, and stay with it. So if you are one of those select few, I want the best for you, and I can think of no better way than to get you to make lots of money, but more importantly to give you your life back.
And I won’t stop until I’m done. And I won’t be done for a long time.