There are different time periods associated with candlestick charts. For example, with a 5-minute chart each candlestick represents 5 minutes of price action. With a 15-minute chart each candlestick represents 15 minutes of price action. You can have charts of any length; 1 minute, 1 hour, 4 hours, 1 day, 1 week, etc.

With all of the different charting time periods, you are probably asking yourself "which charts should I be using?" The 5-minute charts? The 10-minute charts? The 1-day charts? The truth is it doesn't really matter. However, there are a few differences that you should be aware of before making a decision on which charts to use in your own Forex trading.

First, smaller time frames are less reliable. There is not as much data per candlestick on a 5-minute chart as there is on a 1-hour chart. Therefore, the 1-hour chart will be a little more reliable than a 5-minute chart. A 15-minute chart will be slightly more reliable than a 5-minute chart, but slightly less reliable than a 1-hour chart. Likewise, a 1-hour chart will be a little less reliable than a 1-day chart. Now before you decide to start using 1-day charts you should also hear about the negatives of 1-day charts.

A 5-minute chart will produce 12 candles over a 1 hour period, 1 every 5 minutes, while a 1-hour chart will produce 1 candle over the same period. A 1-hour chart will produce 24 candles over a 1 day period, 1 every hour, while a 1-day chart will produce only 1 candle over that same 1 day period. The shorter the chart's time period the more candles there are in any given amount of time. That means that you will get entry signals a lot more often on a 5-minute chart than you will a 1-day chart, simply because there are more candles produced. On a 5-minute chart you may get anywhere from 2 to 7 signals in a 24-hour period of time. However, on a 1-hour chart you may only get one signal every day or two. On a 1-day chart you may only get a signal once every few weeks or even less often.

As you can see, if you want to trade more often you don't want to use a 1-day chart, a 1-week chart, or a 1-month chart. If you want to be placing trades every day or almost every day you'll need to use the 1-hour charts or smaller time-frames.

There are other factors involved concerning the different time-frames that you should also be aware of. The average risk on any one trade will be greater with a longer-term chart than it will be with a shorter term chart, but the potential profit will be higher too. On a 5-minute chart you can certainly get into big winning trades, but the profits are usually not very big. On a 1-hour chart the initial risk will usually be larger than on a 5-minute chart, but the potential profit is larger too. Also, the trades won't last as long using a 5-minute chart as they will using a 1-hour chart. If you use a 5-minute chart your trades will usually last anywhere from a few seconds to a few hours, but if you use a 1-hour chart your trades can last days and sometimes even weeks. So which charts you use depend on how often you want to trade, the amount of risk you want to take on any one trade, and other factors.

Some people will prefer to use the smaller time-frames for charts because they'll want to be making their Forex trades more often. Then on the other hand there are people that will be able to reduce their stress if they're not needing to be watching the charts constantly. These traders will use the longer term charts where they can enter a trade and then leave the computer for awhile, maybe even for a few days.

I have found that it is a lot less stressful for me trading from the 5-minute chart than a 1-hour chart because the initial risk is so much smaller. Plus, once the price moves in your favor, which usually doesn't take too long (although it can occasionally be a few hours), you can move your stops and then relax knowing that you have a locked in profit. Also, even though the wins may be smaller they will usually happen much more often. And winning a trade is always fun.

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