Trading the Weekly Timeframe

Filed under: Learn Forex Trading |

Not many people have the patience to trade off of the weekly timeframe in the forex markets because it takes so long for a trade to come to fruition. But there are a number of advantages to doing this and I would like to talk you through some of those advantages today.

 

Screen shot 2013-05-28 at 10.38.08To begin with, the weekly timeframe charts have some fairly reliable levels in the forex markets. These might not be quite so accurate as the levels on the daily charts, but there is a reasonable level of reliability. However, the really great thing about trading the weekly charts is that, as your stop loss tends to be further away, the spread has less of an impact on your bottom-line profit/loss figures. Moreover, another example is also that you get plenty of time to think about trade setups – the whole weekend in fact! As the weekly candles close on a Friday and open on a Sunday, that means you get the whole weekend to plan your strategy – which eliminates any rash trading decisions.

 

Due to the nature of the weekly charts, if you are trading, say, twelve different forex pairs, then over the course of a year, you might only get a handful of good trade setups on the weekly charts. However, if you add this to your trading routine, then this, in the end, might make the difference between an average trading performance, and a very good trading performance – and are well worth taking. They may take a while to pay off, but they can sit happily in your trading account, in the background, and accumulate some pips. The only downside is that capital can be tied up for a significant amount of time – but as long as you are adequately funded and do not overtrade, then this should not be a problem.

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