What is The Best Time Frame for Trading?

What is the best time frame for trading? That depends purely on your personal preferences, the instrument you are trading, as well as your trading strategy. A 15-minute time frame is a good starting point in the middle. From there you can determine if you want a shorter or longer time frame.

Keep in mind that the shorter the time frame you are trading, the less time you have to process the information and make decisions. Also, different instruments have different amounts of candles per day or per week. For example, crypto markets have 24 hourly candles per day, where stock markets only make 7 hourly candles per day.

What is the time frame in trading?

Time frame in trading means the time, how much one candle represents. If you are trading at 1-hours time frame, 1 candle represents price movement of one hour. If you trade a 5-minute time frame, one candle takes 5 minutes to perform.

Hourly and 5-minute chart from 3-hour period

In the picture above, on the left you can see 1-hour time frame candles from the span of 3 hours. On the right is the same 3-hours period in 5-minute candles.

What is the best time frame for day trading?

The best time frame for day trading comes down to personal preferences as well as skills. For more experienced traders, even shorter time frames can be good places to get trades. The shorter the time frame, the harder it gets to analyze the data and determine whether to take short or long positions.

When using shorter time frames such as 1-minute to 5-minutes, keep an eye on longer time frames as well. Watch the trend direction in hourly and daily charts and use that data to determine your trades as well.

I feel like 5-minute to 15-minute charts are the most comfortable. When trading with those time frames, you have enough time to analyze the data, yet it doesn’t take too long for new candles to form.

What is the best time frame for beginners?

For beginners, the longer the time frame the better. This gives you more time to analyze the data as well as see the trend direction more clearly in just one chart.

Swing trading would be a good place to start for beginners. You have a lot of time to analyze the data on the markets and this also stops you from hesitating when making decisions. I have a post about how long it takes to learn day trading and how to learn. You can read it here.

What is the best time frame for crypto trading?

The difference between crypto trading and trading stocks, for example, is that crypto markets are always open. They don’t shut down for the night or weekend. Therefore, there is much more data available as well as coming out.

Daily, you will have 24 hourly charts, instead of 7 hourly candles per day on US stock exchanges. Because this is the case, you can use longer time frames to trade in cryptos. If you trade stocks with a 1 hour time frame, you could use 4-hour candles to trade cryptos to get almost the same number of candles per day.

Of course, this example doesn’t take into consideration off-market movements. The stock market doesn’t always open where it left off the night before. In crypto markets, there are no such leaps because they are always open.

On the daily chart, the crypto markets also get more candles weekly. Where stock markets are usually open for 5 days a week, crypto markets get 7 new candles every week. This is one thing to consider when trading cryptos.

In conclusion, I would say it is better to trade cryptos with longer time frames, because the markets allow that. You have a lot more data along the day in crypto markets compared to stock markets. Therefore, you can use longer time frames more freely.

What is the best time frame for forex trading?

Forex is also open for longer than stock markets. This is because of different time zones in the world. There are different factors driving the currency charts than stocks, where news on different companies might affect prices a lot.

In forex, the most common time frame is probably a 15-minute chart. It is a good middle ground between very short time frames and longer time frames. You can keep an eye on both sides, 1-hour charts as well as 5-minute charts along with 15-minute charts that you are trading.

The 15-minute chart gives you enough time to analyze all the data, but it also doesn’t take too long to build up new candles. Therefore, I would say it is the best time frame for forex trading. Of course, it all comes down to personal preference, but the shorter the time frame, the harder it gets to analyze the data in a given time.

What is the best time frame for swing trading?

Swing trading is a lot like day trading but can be a more relaxed alternative. Best time frame for swing trading is something between 4-hours chart and weekly chart. It also depends on the market you are trading.

If trading stocks or indexes, you only get two 4-hour candles per day. Whereas in cryptos, you get 6 of them every day. That means that in crypto, you might want to use a daily chart instead of a 4-hour chart.

In stock markets, I think a 4-hour chart gives better data on swing trades, even if you are taking long swings. Weekly charts, however, are a bit too long for my taste, but if that’s what you like, go for it. Afterall, it all comes down to personal preference and your trading strategy.

Final words

In summary, it all comes down to personal preferences and the instrument you are trading. Also keep in mind that the shorter the time frame you trade, the faster you have to analyze the data and the more difficult the trading can be.

When going for really short time frames such as 1-minute charts, keep an eye out for longer time frame trends as well. It can be a very valuable addition to your process of determining when to enter or exit a trade.

Other day-trading related posts can be found here.

Hopefully this was helpful to you, have a nice day.

This is not financial or investing advice. Some estimates say that 95% of day traders lose money. Always do your research before risking your hard-earned money.