An hourly chart is longer than a minute chart, and a daily chart is a short-term chart. Therefore, it can be said that it is a very recommended time frame because it is also a time frame that makes it easy to see the overall direction. There are several points that can be seen on an hourly basis.
What is timeframe?
Beginners who have just started trading may not know the concept of time frames. Hourly indicates a chart divided by a certain sense of time. Although there are differences among Forex companies, there are generally the following timeframes. The mechanism is that candlesticks are formed at 1-minute intervals for 1-minute bars, and at 1-hour intervals for 1-hour bars.
- 1 minute
- 5 minutes
- 15 minutes
- 30 minute foot
- 1 hour
- 4 hours
- 8 hours
- Daily
- Weekly
- Monthly
Characteristics of short-term bars
Short-term bars refer to time bars with very short intervals, such as 1-minute to 5-minute bars. These have advantages and disadvantages, such as being easy to capture movements because of their fine movements, and having a lot of fakes. In general, it is a short-term foot that is often seen to grasp the entry timing. Scalping is the only way to fight with short-term legs as the main.
Characteristics of long-term bars
Long-term bars are time bars that are formed with long spans such as 4-hour bars and weekly bars. These long-term bars have almost no fakes and are easy to grasp the overall direction, so it is absolutely necessary to see them when doing day trading or swing trading. The problem is that it is difficult to find an entry point, but the biggest advantage of the long-term chart is that it is easy to grab a large price range.
Points to use 1 hour
The points that can be seen when trading by looking at the hourly chart are as follows.
trend change
In the case of the hourly chart, it is a point where you can see the timing of whether to convert from a daily chart or a long-term chart such as an 8-hour chart in detail. It tends to be a good entry point for swing trading and a good entry point for day trading. For example, if the 1-hour chart is as shown below, it is easy to see the timing of switching from selling to buying and from buying to selling.
If you look at the points circled in red, you can see that there are whiskers and that there is trouble in the range band and it is likely to change. If you look at this on a daily basis, you don’t even know if you’re in trouble. It is a point where you can see whether it is possible to change the trend if it is an hourly chart. Therefore, by looking at the daily and hourly charts as a set, you can see the timing of the trend change.
Source : Tradingview
Long-term entry point
If you are aiming to switch from selling to buying on a daily or 4-hour timeframe, or from buying to selling, you can find an entry point by looking at the 1-hour timeframe. The 1-hour chart is very suitable as a point to measure the timing of the trend change from the swing trade perspective. If this is a 1-minute timeframe, it’s like looking through a magnifying glass, and it’s too close to understand.
trend follow
In the case of hourly charts, trend-following strategies at the daily level are also likely to work well. The chart below is a selling trend, but it is easy to get stuck if you put in a sell entry where the buyback is tight. If the buyback is tight, you can cut losses and wait and see if the trend is likely to change. It is difficult to determine when the buyback will end at the daily level, but it is easy to grasp at the hourly level.
Source : Tradingview
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