How to chose Stock Charts Time Frame ?
Why do we need to choose a timeframe? Many newcomers do not attach importance to this. And in vain! After all, for each style of trading is different timeframe. The constant change of timeframe is similar to the constant change of a class of cars in races – you will go to many, but you can not reach the finish line.
There is also a downside to the coin – working only on one timeframe, you miss the opportunity to earn money on others, you lose flexibility in your trading system. Many newcomers hope to find a 100% profitable strategy on only one timeframe and miss a lot. Let us be more flexible and consider all options!
Those. this is the time that includes one candle or bar.
The increase in the timeframe is directly proportional to the duration of the period for analysis, i.e. the longer the period, the higher the timeframe.
The letter of the timeframe shows to what time interval it relates, and the figure – for how many units of time a candle or bar is formed.
M – minute. M1 – one-minute, M5 – five-minute, M15 – fifteen minutes , M30 – thirty minutes.
H – hourly. H1 – one-hour. H4 – four-hour.
D – day time. D1 – one-day trips.
W – weekly. Sometimes referred to as W1.
M – for a month. Sometimes referred to as WN .
Y – annual.
In trading, the senior and junior timeframes are also singled out. The first is a time interval of 1 more than the specified one (for example, for H4 this will be D1 , and for D1 it is W1 ). The second is a time interval of 1 less than the specified one (for example, for M15 this will be M5 , and for H1 it is M30 ).
You can change the timeframes – switch them by pressing the necessary timeframe button on the terminal panel.
Each timeframe is good in its own way . “Bisons” of trading are traded on small as well as large timeframes. Of course, everyone has their own “pet”, but they know how to trade at all. As practice shows, experienced traders are focused on increasing the percentage of their deposit, and beginners – on the amount of currency they have in their account. The goal of a successful trader is to constantly increase profits, and the goal of the beginner is to “cut down the cabbage.” This determines the choice of the timeframe.
Beginners try to make a profit as quickly as possible, i.e. trade on small timeframes, make more deals, do not comply with risk management. As a result, everything is “poured”!
It’s like racing.
Experienced “racers” smoothly and gently lead their “baby” from turning to turning, skirting the obstacles and calculating the risk. After all, they are trying to win the entire race and come to the finish unscathed to play next. And the newcomers press the pedal into the floor and race at full speed, creaking fit into the turn and whistling flying over the pits. It should be faster, otherwise they will take the whole victory, the “track” will be closed and everyone will have to wait for the next season. As a result, the bursting tires, the maximum consumption of the “fuel” (deposit) and the chances of getting alive decrease with the speed of sound!
If you came to trading for a long time and thoroughly, it is better to gently and smoothly lead the “baby” along a long “track” – and the skills are typed and live will remain! First, choose the “routes” – H1 and H4 . Here you will not have such a strong psychological pressure, enough time to prepare for a turn (deal), a more understandable price picture (you’ll see the entire “track” entirely). You can adhere to your algorithm, comply with risk management, save (or even multiply) your “fuel”. Having thoroughly learned this “route” of the market, you can try your hand at shorter distances.