Choosing the right timeframe for your chart is also half of the recipe for a good or bad trade.
Choosing the correct time frame is also very important, depending on the results you want to achieve. It is equally wrong to open a long-term trade on a short-term chart and to open a short-term trade on a long-term chart.
The timeframe you are looking for should be proportional to the trade you want to open. For example, it is better to select a period longer than the duration of your planned deal, but not by much.
This is done for the following reason: the trader must be able to analyze the past performance of the asset he is interested in, and therefore needs information about past prices. However, looking too far into the past can be counterproductive sometimes, as information on certain types of assets can be deceiving. You might not need to find a very long trend if you are planning a short-term deal, and you certainly don't want a long-term deal to based on a small trend or deviation of a larger trend.
We hope that, with this article, you were able to understand better the trading charts and the timeframes you need to use to achieve great trading results. Make sure to check a few great trading strategies
as well to level up your trading skills!