Lots of people who develop an interest in forex trading immediately start poring over endless different charts of all the major currency pairs in order to construct a profitable way of making money. However there are certain time frames that are easier to trade, and more profitable than others.
Most forex traders head straight for the 1, 5 and 15 minute charts because they automatically assume that if you want to make the big profits, then you have to trade lots of different positions all day every day. This isn’t the case, however, because just one or two profitable trades per week could eclipse all of these trades on the smaller time frames.
The problem is that these small time frames, particularly the 1 minute and 5 minute charts, contain a lot of noise (ie random price movements) which makes it extremely difficult to consistently predict where the markets are heading in the short-term. Indeed these random movements will often render any technical analysis you do to be completely useless.
For instance you can get what looks like a perfect set-up, enter a trade, see the price move in your favour by say 3 or 4 points, and then reverse back again. So in this case your analysis was spot on but you still didn’t make any profits.
This is why it’s much better to look at longer time frames. Some people like to adopt a long-term strategy and use weekly or monthly charts, for example, but although these can yield substantial profits, I don’t necessarily think these are the best charts to use for people new to forex trading. This is simply because it can take a long time before you have the required patience and discipline to hold onto positions for such long periods of time.
Therefore I believe the best time frames to use if you are new to trading are the 4 hour and daily charts (and maybe even the 1 hour charts as well). These time frames are just about perfect because they will not be adversely affected by the market noise that you get on the shorter time frames, and yet they are not too long that you have to hold onto positions for many weeks or months. Plus of course any price moves that occur will generally respond very well to technical analysis which will have a significant impact on your overall profits.
So my advice would be to forget about scalping the markets where trades last a matter of seconds or minutes, and instead focus on finding high probability positions that take much longer to unwind. Not only is this a much more relaxed method of trading, but it is usually a more profitable one as well.