Intraday Trading
Day traders open and close all their positions before the end of a trading day and never hold them during the night. Since day trading relies heavily on technical analysis, it is best to choose a timeframe between 5 minutes and 1 hour.
The choice will depend on the frequency of your trades and the volatility level you prefer. If you hold your trades throughout the day, select the 1-hour chart. If you choose a higher frequency trading, pick lower timeframes.
Day traders also need to identify the major trend that is best detected on 4-hour or daily charts.
Scalping
One of the most popular and profitable types of intraday trading. Positions are held for only a few minutes. You can choose any timeframe from 15 minutes and below.
Swing Trading
Low frequency trades are considered the safest and most profitable. Swing traders keep their positions open for days or weeks. This type of trading is based on a combination of fundamental and technical analysis. Since swing traders base their trading decisions on the fluctuations of the major trend, they prefer timeframes from 4-hour to daily.
Position Trading
These traders prefer long-term investments. They hold their trades for weeks, months, or even years. Position traders should choose the highest possible timeframes - from daily and above.
Trend Trading
These market players can be divided into two main groups:
- Basic trend trading. These traders enter the market at any phase of the trend and hold positions until the price moves in their direction.
- Trading on a trend reversal. These players wait until the price changes its direction and open positions at the very beginning of the trend in order to get the maximum profit.
There is no optimal timeframe for trend traders. It all depends on the frequency of their trades:
- M15 charts and below for scalpers
- M5 to H1 charts for intraday traders
- H4 charts and above for swing and position traders
If You Are a Beginner
In this article, I’ve indicated several possible timeframes for each trading style. If you are a beginner trader, choose the highest of the options presented. The lower the timeframe, the more false signals and market noise on the chart.
You can choose lower timeframes once you gain more experience. The market offers much more trading opportunities on lower timeframes. However, this entails much higher risks. So take your time and move from top to bottom. Good luck!