Best Time Frame for Intraday Trading

When you look at the price chart of a stock, you often find periods when you could have closed the operations with the highest profit. If only one could foresee one more movement and act before it happens and not after it is already done.  

Most traders new to this could lose sleepless nights trying to solve this puzzle. They would look into technical indicators and practice charting techniques so they could be the first ones to notice the next breakout. 

The professional trader is aware that over-analyzing an asset’s price is futile, and hence, the goal is to prepare for the trade’s entry and wait for the appropriate market condition to reduce the potential risks. They would also appreciate that considering trading several assets within various analysis periods completely changes the picture.

The difference between viewing an asset, firstly within a period of 1 minute and secondly within that of 1 week, is dramatic and changes the economic sense of the matter by getting the best soc's rendering that fits one’s trading plan.

In this article, we explore what the trading time frames are, and match each of them with dominant short-term trading strategies that they best complement.

What Is an Intraday Trading Time Frame?

Time frames affect the frequency of your trades, thus it is important to adopt one that is in line with your expectations and trader profile. In other words, you must first identify what kind of trader you are going to be and only then determine the proper time frame to use for the analysis. Day traders and long-term investors will not have the same time frames because they look at different trends & trades.

Time frames can, in general, either range from several minutes to several hours, days, weeks, months, or even up to several years. If the time frame is less than or equal to 1 hour, you can expect to see more signals for trades being opened. This is however not always a good thing because more often than not, a lot of this data becomes noise which is hard to refine through and at most times inhibits sound decisions when trading.

So, it is possible to go through time frames on the chart like this one that depicts candles. The time units in which a candle is built change based on the time frame settings done by the trader.

Consistent with the day trading definition which is one of the intraday trading kinds that deals with short term price movements usually taking place within a few minutes to a few hours, it almost always uses very short time frames most of which are 15 minute or 5-minute charts.

What Is the Best Time Frame for Intraday Trading?

Day traders tend to focus on smaller price changes that can be completed within the timeframe and limits of one trading session. They can afford to sustain their trades for only a few hours, but it is not a must. Most day traders employ margin trading techniques, and for day traders, this is usually a choice between the different time frames.

There are objectives in day trading that strive to capture minute price movements within intervals that last for minutes, hours, or a day, regardless of whether the open position is held until the end of a trading day. That is why not necessarily education, but mainly a practice in day trading, aims at fueling investors via proper time frame sense. Examples of regularly used timeframes when trading such strategies intraday are charts with time intervals of 1, 5, 15, 30, and 60 minutes.

It is really important to make sure that the selected trading frame corresponds to your profile and strategy. Therefore, it is highly recommended that you practice on a demo account at different time intervals before making actual trades.

For example, scalpers targeting profits of a few points will typically trade with 1-minute or 5 minute charts. They avoid making one big win in a day after several hours of trading and instead prefer to make a number of smaller wins over many trades throughout the day. This is also the reason as to why they normally have a small stop loss so that they can protect themselves but act fast and cut their winning trades.

Should You Trade in the First Half or the Second Half?

The saying that trading in the first half is better than in the second half as an intraday trading period is a myth. Depending upon your stock analysis, you can trade at any time during the market hours.

There are some of the things you must know about the first or second half of intraday trading are that the initial half of the day (from opening bell and then to noon) has more active trading, and a wider price range is encountered as the time when the market simply absorbs the opening news/information and the first round of trades is carried out. This may provide more chances for traders.

There is a spike in the movement of the intraday stocks in the early morning. This gap up or gap down is a breakout and can profit a lot of traders. In the afternoon, movement can be seen to be at a very slow rate. At this moment, the volatility may be high or low. Just before trading sessions close, the failure of the trend to persist is often followed by a resurgence & broadening of the trend. However, as opposed to that, the behaviour of the market is subject to many conditions.

As of now, let us examine the situations with the help of which we can trade in different time frames:

15-Minute chart

Scalpers would take advantage of the 15 minutes time frame as they execute several positions within a single day. Since they have a wider watchlist, such traders normally would take a somewhat longer time frame to assist them in scanning and studying price targets in the best possible way. In this case, a shorter time frame would contain a lot of ‘noise’ and therefore make it more difficult for a trader to clean up the entry points.

A 15-minute chart is, notwithstanding, very optimal for a notable category of day traders who sweep through intraday charts. In this time period, traders have a good understanding of both support and resistance levels and do not miss out on good opportunities as far as making money from fluctuations in the price is concerned.

As indicated previously, trading within the 15-minute time frame is one of the popular day trading strategies.

5-Minute chart

The chart provides scope to the day trader to trade on price reversal formations and hold out for the new trend to develop. This strategy is often used by traders who are interested in making fast changes in their open positions.

Such an investment approach is applied by setting a few trades a day with the heavy use of both 15-minute and 5-minute charts. There is really no advantage in using one over the other; it depends mainly on one’s trading strategy.

1-Minute Time Frame Trading

They are mainly intended for skilled scalpers only. Scalping explained previously is a trading technique that seeks to make many small profits on price changes.

This particular time frame calls for a deep comprehension of the market structure and sound trading discipline. Scalping with 1-minute charts involves a comprehensive export plan and abundant information.

This time frame is very intense as in every minute new candlesticks appear and any time a new trade signal could come in. As new candles/bars come in frequently, it is also very clear that 1 minute chart traders make use of more transactions relative to 5 minute or 15 minute chart traders.

Understanding that this situation does not last for long, the traders whose time frame is 1-minute candles.

Types of Intraday Trading Charts

Intraday trading charts represent the movements in prices and the relevant changes in conditions of instruments in one trading day graphically. These charts are very important for traders when analyzing price fluctuations that occur in a short duration. There are several popular types of intraday trading charts. Here are some of the most common:

• Line Chart: This chart connects the closing prices of a stock over a specific time frame, forming a line. It’s simple and useful for observing long-term trends.
• Candlestick Chart: One of the most popular charts, it provides detailed information, including the opening, closing, high, and low prices for each time period. Each candlestick represents a specific time frame and helps identify market trends and potential reversals.
• Bar Chart: Similar to candlestick charts, bar charts display the opening, closing, high, and low prices. The vertical line represents the price range, while the horizontal lines on the left and right indicate the opening and closing prices.
• Renko Chart: Such a chart consists of no time element, focusing only on the price movement in the chart. This uses bricks, which are moves in price that an amount exceeds, in order to remove those little price moves and show those that matter.
• Volume Chart: This chart shows the trading volume for a specific time period, helping traders understand the strength of a price movement.
• Point and Figure Chart: This chart plots price changes without considering time. It uses Xs and Os to represent price increases and decreases, respectively, and is useful for identifying support and resistance levels.
• Tick Chart: This chart plots price changes based on a specified number of transactions, rather than time. It’s useful for high-frequency traders who need to analyze market activity in real time.

Conclusion

The most effective time frame for one day of trade will depend on what type of trader one wishes to be. For example, those retail investors who generally want to make lesser profits per trade and perform several trades in a day will most of the time go for a five-minute or a fifteen-minute time frame.

A day trader is oriented to perform a single trade in a particular session and aims to minimize the risks involved relative to using a thirty-minute or one-hour time chart. Experienced day traders would want to use multiple time frames mainly to confirm the signals for the trade and the trading levels.

In this case, the concept of a time frame is somewhat personalized for every trader. In this case, what the traders would advise is that after picking the main time horizon to be adopted, other time frames should be picked, too. 

FAQs

1. What’s the best time frame for quick trades?

For quick trades, a 1-minute or 5-minute chart is ideal. These time frames allow traders to react swiftly to price changes and execute trades quickly, capturing small price movements.

2. How does a 15-minute time frame benefit intraday traders?

A 15-minute time frame balances between short-term noise and trend visibility. It helps traders spot trends while reducing the randomness seen in very short time frames like the 1-minute chart.

3. Is a 30-minute chart useful for intraday trading?

Yes, a 30-minute chart is useful for identifying broader trends and setting up trades based on more stable price patterns. It provides a clearer view of market direction while still being suitable for intraday decisions.

4. Can using multiple time frames improve trading decisions?

Absolutely. Combining different time frames, such as using a 5-minute chart for entry signals and a 15-minute or 30-minute chart for trend confirmation, can help traders make more informed decisions and reduce risk.

Also Read:

• Intraday Trading Tips for Beginners

• Income Tax on Intraday Trading

• Intraday vs Delivery Trading– Understand the Differences

• Intraday vs Positional Trading: Which One Should You Prefer