Day trading timeframes


Day Trading 101: When you start trading, you need a strategy. And part of that strategy will include the timeframe that you use on your trades. Obviously, your time frame for day trading is less than a day.

Popular intraday time frames are 60 minutes, 30 minutes, 15 minutes, 10 minutes, 5 minutes, 3 minutes, and 1 minute.

If you choose a smaller time frame (less than 60 minutes), your average profit per trade will usually be relatively small. On the other hand, you get more trading opportunities. When you trade in a larger timeframe, your average profit per trade is greater, but you have fewer trading opportunities.

Smaller time windows mean smaller wins, but usually also less risk. If you’re starting out with a small trading account, you may want to choose a small time frame to make sure you don’t overwhelm your account.

However, if you choose a very small time frame like 1 minute, 3 minutes, or 5 minutes, you can experience a lot of “noise” caused by hedge funds, scalpers, and automated trading.

You might think that you are seeing a trend emerging only to realize that it was only a brief manipulated move and that the trend will be over as soon as you enter the market.

So I recommend using 15 minute charts. This timeframe is small enough to capture the nice intraday moves, but it is large enough to eliminate the market noise and correctly display the “true trends”.

When developing a trading strategy, you should always experiment with different time frames. A trading strategy that doesn’t work in a small time frame can work in a larger time frame, and vice versa.

Start developing your trading strategy with 15 minute charts, and if you are not happy with the results, change the time frame first before changing the entry or exit rules.


Source by Markus Heitkoetter