There are many timeframes offered by charting platforms it can be overwhelming. Sam covers the basics of chart timeframes, recommends specific timeframes to analyse, and gives a list of chart time frame tips.
BO105 Lesson – Chart Time Frames Video & Transcript
Welcome to Binary Options 105, Chart Timeframes. This is part of our Binary Options 100 training course which is brought to you by binaryoptions.education. Chart timeframes.
In Binary Options 103, I recommended some charting programs.
This is tradingview.com. At the top-left here, I have the financial instrument, the Euro/USD, and I have the timeframe, which is 15-minute. On this drop-down list, you’ll see I have a number of available timeframes to choose from, anything from one minute to one month.
But what does it mean to have a 15-minute timeframe or an hourly timeframe?
Well, let’s look at this 15-minute timeframe first. It means each one of these candles or bars represents 15 minutes of price data or price movement. So say on the hour, this candle would open; at quarter past the hour, it would close and another candle would open. Half past the hour, this candle would close, another candle would open, and so on. So every 15 minutes, a candle is closing and opening.
If we were to look at an hourly chart, then each one of these candles represents an hour of price data or price movement. So on the hour, a candle would open. The hour following, it would close and another would open. And this just carries on. And in future videos, I will teach you how to read these candle charts to speculate with higher probability where future price is going to be.
With such a selection of chart timeframes to choose from, which timeframe do we use? Well, I think that’s determined by which expiry are we using when we trade binary options. If we’re using a 60-second expiry, then I would strongly suggest using a one-minute timeframe. If we’re using a 15-minute expiry, then it would make sense to use a 15-minute chart timeframe. If we’re using an end-of-day expiry, then perhaps a daily timeframe.
You may ask the question, which expiry should I be using? I will cover that in a future video. But basically, it’s determined by your trading strategy. Some strategies would work better on longer expiries, whereas some may work better on shorter expiries.
|Which Expiry to Use?||Price Chart Time Frame|
|60 Seconds||1 Minute|
|15 Minute||15 Minute|
|30 Minute||30 Minute|
|End of Day||Daily|
So I’m going to give you some chart timeframe tips. The first one is zoom out. And to explain this tip, let’s look back at our chart at tradingview.com. So here’s our Euro/USD 15-minute timeframe. If we were currently trading binary options and we had this chart open as it is, it’s quite hard to tell where price is actually going and where it’s been. It looks like price is just moving in a kind of sideways direction. There hasn’t been much change of where price has been over the last 15, 16 hours. The time of day is at the bottom of the chart here.
But you’ll see as we start to zoom out, we soon get a better picture of what is actually happening. OK, so this is the data we were looking at. And price isn’t actually moving in a sideways direction, but it’s steadily moving in an upwards direction.
But it’s not just the overview of price we need when we zoom out, but there could be potential areas in the market such as these lines here which provide potential opportunities to place call and puts and profit.
Now, these lines have been drawn by connecting this high here and this high here and this low here and this low here. And in a future video, I will go into more detail on what these lines are and how they work. But when we were so zoomed into the market, these lows and this high were not even visible.
Another trading tip would be to use a dual monitor system or to have two monitors. This is not essential. One monitor is sufficient for trading. But if we do have two monitors, we can use one for our timeframe and the other for our trading platform, so we don’t have to keep minimizing or maximizing our screens.
Analyze the most popular timeframes. We want to be looking at the timeframes the professionals are using. And these timeframes are the 15-minute, the hourly, the four-hourly, and the daily.
Stick with this course, as I will teach you more about chart timeframes and how to read charts and benefit from them. And then the last trading tip, which is very much my personal opinion. And that is the higher timeframes seem to be less random. They seem to be a bit easier to read and more reliable. I’m going to say higher timeframes. Once again, this is my personal opinion. But anything from hourly upwards.
So thank you for watching another video in this series. Please stay with us on this course, and please check out our website, binaryoptions.education.