Trading Higher Time Frames Drastically Increases Trading Success
Forex traders are often tempted by the lure of lower time frame charts; they think they are somehow getting closer to the “real” action in the market and that they will find more trading opportunities on these fast moving charts. The reality of the situation is that the lower in time frame you go the less accurate any trade setup becomes, therefore, by trading lower time frame charts all you are doing is lowering the probability that any trade you take will be a winner by adding more variables to the equation of forex trading. Anyone who has been following my articles knows that I often talk about how dangerous it is to over-complicate your trading and that the keys to forex success are having the patience to wait for the best trade setup and thoroughly understanding forex risk to reward scenarios. Therefore, this article will discuss the advantages of trading the higher time frame charts and how they can help you become a patient and profitable trader
• Higher time frames act as filters of market noise
First off, by “higher time frames”, we are referring to the 4 hour time frame and above, any chart less than a 4 hour chart is considered a “lower time frame”, 1 hour charts can be useful to more experienced traders for refining their entry or exit, but they are still considered a lower time frame and should be avoided by beginning traders.
One of the biggest advantages of trading the higher time frame charts is that they act like filters of price movement. The forex market has such high daily trading volume, that the lower time frame charts contain what market technicians refer to as “noise”. The noise of the lower time frames is basically just price movement that is so erratic that it cannot be reliably used to make trading decisions; however, many traders get tempted by this erratic price movement because the human mind naturally tries to find patterns in nature and in the financial markets.
When you trade the higher time frames you get a clearer picture of what is really happening in the market because most of the erratic market noise of the lower time frames is eliminated. For example, if you see what looks like a large up move on a 30 minute chart, it might just be the beginning of a daily bearish pin bar, but if you were trading the 30 minute chart you might see this big move and then find a reason to jump on board only to have it come crashing down against you into the daily close. There are so many opportunities on the 4 hour and daily charts that concentrating your mental energy on lower time frames is simply an inefficient and ineffective use of time. Traders need to understand that the market will still be there tomorrow and the next day and for the rest of their lives, so missing out on a few good opportunities per week on the lower time frames is more than worth the sacrifice when you consider there will always be more accurate opportunities on the higher time frames.
• Trading higher time frames is part of the K.I.S.S. forex trading strategy
Simplicity is one of the keys to forex trading success, it is very important to keep your technical trading strategy simple in design and implementation, because over-complicating your trading is a sure-fire way to begin committing emotional trading mistakes. When traders begin trading on lower time frame charts they start over-complicating the trading process by trying to read the inherent noise that is a part of these fast moving charts, this inevitably causes them to over-trade which is one of the main causes of failure in the forex market. Remember, keep it simple stupid.
Higher time frame charts provide a much more useful and accurate depiction of price movement, this will enable you to be more confident in your trading decisions which will begin reinforcing a series of positive forex trading habits. Many traders struggle for years trying to trade lower time frame charts, eventually they either give up all together because they have lost too much money to bear, or they figure out that trading the higher time frames is a necessary component to consistent trading success. By understanding this fact now, hopefully before you have lost much money in the market, you can begin to focus your time and energy on the higher time frames and avoid the struggle and frustration that comes with trying to analyze the noise of lower time frame forex charts.
• Patience is key, higher time frames foster patience
It is no big surprise that traders who take a longer-term view of the market and trade higher time frames make more money, on average, than day traders. The reason why is because higher time frame traders naturally take far fewer trades than day traders or traders who mainly trade lower time frame charts. One of the most lucrative trading traits you can possess is patience; it is often overlooked by traders because so many of them erroneously believe that more is better in every aspect as it relates to forex trading. You will naturally take fewer trades when you stick to the higher time frames, assuming that you know what to look for and have the patience to wait for the trade setup you are looking for. Learn to think about this time in-between trades as a period of self-discipline and self-mastery, the very fact that you are not trading when there are no obvious signals means that you are not losing money, and not losing money is the same as making money when you consider the fact that you would be trying to make back what you lost, but since you didn’t lose any money you have nothing to try and make back.
By focusing on the higher time frames you also work to influence and develop the proper trading mindset. By trading less frequently you will naturally become a more objective trader because you will not be over-analyzing the market, trying to manifest trading signals on every time frame. Being an objective trader is different from being a fearful trader, objective traders know what they are looking for and when they see it they pounce on it like a tiger stalking its prey, fearful traders cannot act even when they see what they are looking for in the market. So, make sure you do not become a fearful trader, master your trading strategy first, this way you know what to look for, then wait patiently as the market plays out and the amateurs lose money on the lower time frames, when you spot your higher time frame trade setup you execute the trade with confidence and serenity.
• Price action signals are stronger on higher time frames
Finally, perhaps the most important reason you should stick to the higher time frames when trading the forex market is because they add weight to your trading strategy. As a price action trader, I know that a daily pin bar setup is much stronger than a 30 minute pin bar setup; therefore, because I have this knowledge I simply prefer to wait patiently for the perfect daily pin bar setup rather than frazzle my nerves and lose money trying to catch a rare high-quality 30 minute bar setup. Furthermore, I have better things to do with my time than sit around all day and night staring at a 30 minute chart, and I assume you do too.
Price action trading is especially impactful on the higher time frames because price action is naturally the clearest and purist reflection of aggregate market sentiment. When you combine the inherent clarity and effectiveness of price action trading with the power of trading higher time frames in forex, you have a very accurate forex trading strategy.
If You want to learn more about Trading Higher Time Frames and Learn More about How I Trade with Price Action, visit my forex course page here:> Forex Trading Course – Good trading as always – Nial Fuller
76 Comments Leave a Comment
Clarifies a lot of doubts…
You are right… I have better things to do than watching graphs whole day
This is so right – this article is so right.
Beginning, i remember myself trying 30 minutes – 1 hour time frame and you nerve are on and this 12 hour in front of the screen. It’s not relax and it’s also lot of tips for the broker..
Lets pretend we have a strategy that work super well for us at 4 hour, let’s stick it …eventually i can refine the trade entry at 1 hour time frame but noway lower as noise might distract your big picture.
Wonderful article thank you. And all the best.
I nearly loss all my trading account but since I stick to daily timeframe with a price action strategies, am getting better again …
Cheers! Glad you are making progress. Keep learning.
Have read a few of NF’s articles recently and this one I found particularly well written and accurate in its concept. Well thought out and logical apropos the time frames.
nice work bro now i have to work on my mistakes …………..finally forex is real and one can make money from it. I’ve lost a lot following systems that don’t work
Nice information about market moves in corresponding to time frame. thanks Nial.
Thank you Mr. Fuller
Wonderful information about time frames i have the same idea
I agree that higher time-frames should be included in trading, but there is another side to the coin, which is not mentioned here. If you are trading off the daily, you must be mentally prepared to sit through (big) retracements. Not everyone can emotionally withstand the ebb and flow of the market. It is important to find your personal time-frame groove first. I can imagine that for many people this will not be the daily time-frame.
Hans, the dynamics of the daily time frames are very different to intraday timeframes.
Excellent article for people wasting and loosing money with shorter time frame.
Thanks a lot..
Thanks so much for the article.Much thanks again. Great.
Thanks Nial! Your strategies actually work! =]
Have been following your article a year ago, read again and again, sadly never seen any improvement on my skill because I was keep trying on H1 chart without following the trend, not using money management and with bad RRR.
Last month the idea of finding good RRR popped out of my mind, i try to work it out on how to fit this into market together with a good RRR but only has a little improvement because still trading on H1 chart.
Then miracle happened when i decided to give a try on H4 and higher timeframe chart. Never thought it would be so powerful by using all of them together. It is true that beginner must master daily chart first and learn how the market move before moving to lower timeframe H1 or setting own indicator.
I’m trading with much lesser stress now and higher timeframe give me a little more time to alter my trade if the market change direction. Finally I have little grasp on how the market move and knowing why I failed on H1 chart. Will keep monitoring my performance.
Thanks again Nial!! Thank you so so so much! =]
thanks nial longer timeframe smooth progress no rush this game need to be played slowly and creative.
this article has been helpful to me, because ever since i started using the bigger time frames my profits has been more the my losses less.
I dont entirely agree with this article. Shorter time frames have their own uses and i believe this depends on if you are a day trader, medium term trader or a long term trader. If you prefer to trade on the shorter time frames, you can eliminate some of the “noise” by instead focusing less on indicators and also by waiting for solid confirmation of trends before jumping in. Cheers…..
If you try daily timeframe out, you will see the magic. It takes away stress, figuring out quality entries in your trade.
i love this post, all the information here is true, to look at shot time frame means wasting time, at the end you will give-up waiting and jump in! “which means the end of your trading”
Thanks for your posts , its amazing how higher time frames has improved my trading . will follow your posts and become a full time member as soon as i can…Thank you.
Good writing. I think 80% of trader start ends with high frequency trading, which hard to manage emotion, account and time.
This may be slightly off topic but do your setups and advice to use higher time frames work for trading indexes? ( e.g. FTSE 100)
Really enjoying your articles and tempted to give forex a try on demo account, I started by looking at index trading.
Frankly speaking, those who trade shorter time frame charts are fighting against the ‘big men’ of foreign exchange. So, to keep in tune with them, one need to follow them on the higher time frame charts. What an eye-opening article, keep them flowing. Thanks.
This article improved my strategy BIG TIME, I’m making pretty consistant profits now, thanks Nial, very important lesson
Great piece of advice. Have been trading 15 min chart and now at 1 hr will move to 4 hrs immediately.
Absolutely true. Quantum physicists know the smaller the time frame, events in nature become more chaotic and unpredictable. At higher time frames, Newtonian deterministic laws kick in. Nature is trying to tell us to stay out of the tiny time frame domain to avoid unpredictable randomness. The same principle applies to trading. Thanks, Nial.
Thank you dear Nial Fuller. My trading will move to a better height because of knowing you
Its very good insight for me that why to trade on higher time frame ?, in the beginning itself ….. thanks Nial
Always good advice Nial. Thanks!!!
thank you for sharing your knowledge and for all the articles. They are very useful. I look forward to taking your course soon.
I’m very impressed at your way of looking at Forex. I will sign up for your course by the end of this month,I promise.
very good trading lessons.
These are articles are very good. I have never found this sort of help before. Hopefully this is a new beginig.
Fully agree with your advice but how does one trade the higher time frames with a small account of say $1K where the stop loss is usually much bigger. Considering a S/L is always a few pips above or below the last high or low candle, on a higher TF of say 4H that would translate to at least 80 or more pips. A few hits and your a/c is wiped out. Pls advice, thanks.
Trade a micro account. A small account does not limit your ability to trade higher timeframes, that is often peoples perception, but in reality, account size is meaningless.
Your trading is measured in risk reward, so you must adjust position size , thats all you need to do.
Thanks Nial, these trading lessons are very important to me that I am starting to trade with price action.
Thanks Nial. I have heard about this trading on higher time frame gives higher rewards but didn’t know it is this good until you give us such clear explanation. I will now adhere strictly to it. And thanks for being so truthful about the whole issue. Thanks once again!
Thank you Nial.
I can’t just thank enough for your insightful comments and direction as to how to have profitable trading career, it has opened my eyes while i have been on the losing side all this years. I can only promise to strictly adhere to tips. Thank you so very much.
Wonderful writeup.It opens my trading mind.Prof.,thank you.
Thank you very much Nial, your lessons get me out my confusions with trading. It will help improve my trading and will change my trading style.
experience traders already know this and they continue to make money using daily graphs, however, this information needs to be reinforced again and again as we get lost in ‘self-confidence’ after going a few months without a losing trade.
Thank you Nial for this last article. It confirms what I have learned the last year of trading. I have been listening to too much noise in the market. Waiting for setups for the beginner sounds like “a lot missed trades”. But I am learning from experience that I would rather miss a few trades and wait on Higher TF setups that are a higher percentage of good trades. Thanks again for all your articles. Mike R.
Thanks Nial. Had thought of it but never tried. It is a bigger eye opener.
verry good lesson, i think this lesson was posted at the right time and it is meant for me. i picked up a bad habit.and now it is time to get rid of it.
Wonderful explanation. Can see clearly the overall market, very simple to follow
Thank you Mr Nial for your new advice article, most of the time I spend my day in front of the computer with 1hr time frame end up lost. Okay start from to day I start to look at 4hrs time frame but a little bit boring for a start. Anyway thanks or your advice.
Nial is right in his view of the market .Before i was so obsessed with staring at the chart on 1 hour time frame but my first monthly profit on a $5000 account was $600, and it came when i traded a daily chart fakey on GBPJPY,leaving the trade for 4 days and my profit was hit. If you are not a member yet,and you have the money to pay and are still struggling with trading, then you are a proud trader. Kill your pride,join the course and be mentored.
Great article! lower time frames=lower profit and wins as you will most time try to force a setup to exist and waste your time. And when a good setup actualy does showup, you will be to afriad to take. The D1 is the holy grail, give it a try.
Commercial Traders are higher time frame traders. Billionaires Warren Buffet and George Soros are also higher time frame traders.
Nial This lesson really hits home I realise now the time I have waisted on 15 minute charts.I have had my first visit to the members forum and with luck make some progress.
very good Nial
I am slowly learning this.
For the past 2 weeks I have been trading nothing but the 4hr/daily/weekly charts. I find myself less stressed this way. But what I am trying to do when I find a high probability setup is zoom into smaller time frames like the 1 hour to look for price action. I still need sometime (which i am willing to spend) to master this methodology .
Thanks alot Nial, I hope to trade well now with the longer time frame of which I never knew of!
you have really brought hope nad direction to newbies like myselfand all i can say is a BIG THANK YOU.
Thanks for your advice and higher time frame always best for biginners
I have always sticked with H4 and since I added the Daily, I have gotten tremendously good!
THANK YOU NIAL!! you are great!
This is an absolute truth. A truth I had to learn the hard way. Luckily it was on my demo account. Less stress and a higher ratio of winners to losers on the daily chart. Discipline and patience will pay big in the higher time frames. Less time at the computer means less stress. D1 is my timeframe now. Having consistent success (and that’s what it’s all about). Thanks Nial
thanx nial for your wisdom!
Just recently bought your course and now i feel im getting there as im startimg to build profits slowly but surely.You must be a mindreader because i was just thinking of emailing you this very question about using longer timeframes when starting out!Glad i found you as a mentor,thanks.
Great article! Great Teacher… Thanks Nial you made trading so simple… Cheers!
Many thanks for your articles. They are really instructional.
However, I would like to refer you to last week’s article titled-Risk/Reward: The Holy Grail of Forex trading. While using a 1hr chart of the eur/usd for your illustration, you stated:
“It is worth noting that trade setups on the smaller time frames are more likely to hit larger risk multiples since your stop loss will usually be tighter than it will be on a higher time frame”
How do you relate that to today’s article. I need some clarification please.
Thanks for your time Nial.
In that Article I am the lower timeframe is the 1 or 4 hour chart , we are comparing it to the daily.
I always follow and read your articles because your ideas do really come from your direct experience which help us gain more understanding of the forex trade.Big thanks!
yes i agree, i allways base my desicions on the daily time frames and use the lower time frames for price strenth…
I am going to start looking at higher time frames after reading your article, I use a 5m time frame and its very tricky to win, thank you for your lessons, your a star..
just cant thank u enough for your inexhaustive efforts,wishing you God’s blessings!
Hello Nial, a very big thanks to you for sharing this great indispensable, powerful article here again. I am a 1-hour timeframe trader (with the hope of getting quick bucks and leaving the market quickly, but not knowing that daily timeframe is the best place to make that happen, until I tried trading with it), which has put me into some kinds of confusion and serious trouble of consistent lose of trade. But after reading this article, I went back to try it out, and, lo and behold, it worked really well for me. First, I see quality trade entries so easily. Second, fear of taking a trade is gone. And finally, I have rest applying your “Set and Forget trading strategy”. I easily see levels on my chart, which is now helping me greatly to draw my levels like the pros do. Thanks! Thanks! Thanks once again! May you remain blessed in Jesus name.
Thank you Mr. Fuller
I will start focusing my attention to the higher time frames, that should be rather easy to do; I got burnt enough on the lower time frames.
Hi Nial, a big thanks for these informative and educative articles.Indeed am learning alot from your free article. I find them with material one can heardly find in paid courses.Please thanks am always on the look out Friday evening here in Kampala (Uganda) for your next article thanks alot you area great lecturer!
Thanks again Nial – Great article
Hope you had a great Thanksgiving even though you are not in the USA. You don’t have to be in the USA to eat a turkey and just be THANKFUL.
HEY – I am THANKFUL for you and your great lessons that you share with all of us so generously.
Another great article Nial
Thanks Nial, I am trading a demo account at present and can see the wisdom in your article about higher time frames.Thanks for all your wisdom sharing.
Wonderfull piece of information.The higher you fly ,the clearer your vision.Thanks Nial.
vely good comment. the longer the time flame the better.Many tank you’s
Good Article Nial! I trade the 1 hour time frame but always check the daily and 4 hour charts every day!
As the time frame increases the number of signals becomes less. However the signals tend to be more reliable and more profitable than the signals from shorter time frames.
Day traders who trade 5 minute or less charts are competing against very experienced traders and computers! Much too dangerous for me!