Timeframes

The timeframes

When analyzing the market, traders use different timeframes to identify patterns, trends and potential trading opportunities. The common ones, from the widest view to the narrowest:

• Monthly
• Weekly
• Daily
• 4 hour
• 1 hour
• 30 minute
• 15 minute
• 5 minute

Each candle on a monthly chart holds a month of trading, and each candle on a 5 minute chart holds five minutes. It is the same market at a different resolution.

Four styles, four clocks

Styles of trading are usually defined by the timeframe a trader executes in.

Scalping involves very short-term trades, with positions opened and closed within seconds or minutes. It requires close attention to the market and fast execution.

Day trading means opening and closing positions within a single trading day. Day traders use technical analysis to identify short-term opportunities based on price movement, volume and other indicators.

Swing traders hold positions for several days to several weeks, looking for price swings or trends. This style requires a good understanding of technical analysis: trends, support and resistance levels, and the patterns that form between them.

Position traders hold positions for weeks, months or even years, focusing on long-term trends. This style leans on fundamental analysis as well as technical analysis to identify longer-term trends and market cycles.

Reading more than one at a time

Traders often use multiple timeframes together to understand the market. A longer-term chart identifies the major trend, and a shorter-term chart finds the entry and the exit inside it. Different timeframes can give different signals, so a combination of them gives a more complete picture than any one of them alone.

On your own charts

The Trade Desk puts every one of these timeframes a click apart on the same symbol, with your own trades drawn on the price. You can see which timeframe you actually trade from, and whether the higher one agreed with you when you entered.