Time Frame

Table of contents:

What is the Time Frame?

What Time Frames Should You be Tracking?

Trading Example

Bottom Line

FAQs

Time frames are a necessary tool for traders and investors. Different time frames allow you to see a full image of what is happening in the market, all the primary trends, and not just some fragments. Most traders actively use several time frames in their trading daily. In this article, we will tell you in detail what time frames are and how to use them with examples.

Key takeaways:

• The time frame is the time interval that the Japanese candlestick reflects.
• In trading, several time frames are combined to find a successful deal.
• Which time frames to use is an individual decision of each trader.
• Small time frames are used to find an entry point, and larger time frames are used to determine the primary trend in the market.

What is the Time Frame?

A time frame is a time period that a candle reflects. If the time frame is 5 minutes, then 1 candle reflects what happened to the price over 5 minutes. If the time frame is 1 week, then one candle equals one week. Time frames are used to conduct a comprehensive analysis of the market situation to determine a trend, or a trend reversal. Looking at only one-time frame, it is impossible to understand what is happening to the price and to see the main trend.

That is why traders use multiple time frames. Most often traders use time frames of 1 month or 1 week to understand the price situation on a global scale or to see some reversal points or imbalances and trends. Smaller time frames such as 1 day, 1 hour, and 30 minutes are used to find trades, levels, small trends and stop losses, time frames of 5 minutes, 1 minute, 30 seconds are used to enter a trade. Of course, this is just an example, each trader has his own strategy. What are the time frames (according to tradingview): 1 second, 5 seconds, 10 seconds, 15 seconds, 30 seconds, 1 minute, 2 minutes, 3 minutes, 5 minutes, 10 minutes, 15 minutes, 30 minutes, 45 minutes, 1 hour, 2 hours, 3 hours, 4 hours, 1 day, weekly, monthly time frame, 3 months, 6 months, 12 months.

What Time Frames Should You be Tracking?

Large time frames show the main price trends, while smaller ones are more polluted with unnecessary trends and noise. We have already mentioned that the choice of time frames is individual. But still, it is possible to divide traders into 3 primary categories:

• Swing traders - traders who focus on daily charts to find trades, look at the global trend on the weekly chart, and find some short-term trends on the hourly chart.
• Day traders use 15-minute or 30-minute time frames to find trades, the daily time frame to determine the main trend, and entry for trades and some minor trends on the 5-minute time frame.
• Long-term positional traders pay more attention to the weekly chart to find trading solutions, use the monthly time frame to determine the trend and use daily charts to enter or exit a trade.

It is worth remembering that the larger the time frame you use, for example, monthly time frame, the longer you will have to wait for the trade to be completed. Not many traders can withstand long trades, especially if they are in the red for some period, this can be psychologically difficult. Therefore, most traders prefer to trade within a day or week. You don't have to be a swing trader, day trader, or position trader, you can choose the primary time frame you like and trade it, using multiple time frames: longer time frames to determine the trend and shorter time frames to determine trade entry. One word of caution though - don't get carried away by the noise of the short-term chart and don't analyze the trade too much. Short-term charts are usually used to confirm or disprove the hypothesis of the primary chart.

Trading Example

Below we can see the ONDO/USDT chart in a 4-hour time frame. In this time frame, trends, strong levels, and imbalances are visible. The image shows us an inversion imbalance. That is, for 4 hours the price was only for purchase, which created a strong support level, but then the price filled this period and the imbalance became inversion (inverted), forming a resistance level. After the primary wave, we can see that the price reached the boundaries of this imbalance, but could not go beyond it. Also on this chart, you can see the moving average, which displays the main price movement.

Next image depicts a 30-minute time frame, which is good for searching for trades, levels, and stop loss if you trade intraday. You can see that the price was confidently going down at first, and a breaker block (BB) was formed - the last candle before the reversal. The price successfully overcame this breaker block and confidently crawled up.

For another example, let's look at HollyFrontier Corp stock. Below, you can see a daily chart where the price is moving in a fairly narrow range, above the 20- and 50-day moving averages. If you look at the Bollinger Bands, you can see a narrowing due to low volatility, which could be a harbinger of a nice big move.

Looking at the weekly chart, we can see that the HOC stock is gradually approaching a new breakout. Then there was a correction within the price range, which again foreshadowed a breakout.

High-volume breakouts are often risky due to increased volatility. However, a successful breakout on a weekly chart significantly reduces the risk of a potential entry on a daily chart.

By analyzing multiple time frames, an entry point was found. A hammer candle formed at the 20-day moving average and Bollinger Band support, nearing the previous breakout level, indicating potential support. Entry would occur when the stock exceeded the hammer candle's high, ideally with increased volume.

Bottom Line

This was the basic information about time frames. The presence of multiple time frames allows us to study stock behavior more accurately, to see the price history and trend not only fragmentarily, but also in general on larger scales, which allows us to make the right trading decisions.

FAQs

What Are Time Frames In Trading?

The time frame is the price interval that a Japanese candlestick displays on the chart.

What Are The Three Time Frames For Trading?

Each trader can define three time frames for themselves. However, in any case, there is some primary interval that is used to find trades, a higher time frame to determine the trend, and a lower time frame to determine the entry point.

Which Time Frame Is Best For Forex Trading?

It depends on the trader, there is no best time frame. Most traders focus on the time frame they are comfortable with.

What Is The 15 Minute Strategy?

The 15-minute strategy is a trading approach that focuses on identifying and exploiting short-term price swings within a 15-minute time frame. It involves using technical indicators and chart patterns to pinpoint potential entry and exit points for quick trades, aiming to capitalize on rapid price trends.

How Do You Trade A 5 Minute Time Frame?

You can combine multiple time frames: the 5-minute time frame with higher time frames to find the main trend movement, for example with the 30-minute time frame. The entry into the trade can be found on the minute interval.