Best Time Frame for Day Trading and Swing Trading

Making trading decisions based on the best possible time frame can boost the profit potential significantly. However, finding the best time frame for day trading and swing trading can be challenging since so many options are available.

This article explains all time frames in detail to make it easier for you to choose the right one.

What Is a Trading Time Frame?

The term trading time frame refers to the time-based interval on a chart. Time based because the choice typically begins with the lowest-possible time frame of 1 second and goes all the way up to yearly charts. It is crucial to understand that there is a fundamental difference between the best time frame for day trading and the best time frame for swing trading.

Best Day Trading Time Frames

1 Minute Chart

The smallest minute chart time frame performs exceptionally well for automated trading. It is also a good time frame for experienced day traders who already know exacly what to look at. From its nature, the 1 minute time frame is more like a timing-time frame. For example, if you spot an entry on a higher time frame, you can choose the 1 minute time frame to precisely time the entry point.

Trading all-day long from the 1 minute chart does not make sense that much. That’s because you have to analyze 60 candles per hour and over 300 candles during the regular trading hours on NYSE and Nasdaq.

5 Minute Chart

The 5 minute chart is the most popular time frame amongst day traders. This is because 12 candlesticks per hour are manageable for trading manually, and it is the perfect mix of a fast day trading time frame like the 1 minute chart and the slow 15 minute chart.

The benefit is primarily that technical analysis like trend pattern recognition and trend lines can be plotted with enough time before the new candle gets finished.

15 Minute Chart

The 15 minute chart is an excellent choice for day traders who prefer day trading at a slower pace. There are only 4 candles per hour to monitor, and plenty of time between each finished period is more relaxing than having updates every minute.

The 15 minute time frame does exceptionally well for day traders monitoring multiple stocks or other assets at once. While it is hard to manage to watch 10 stocks on a 1 minute time frame, it is easier to do so on the 15 minute chart.

What is the best chart time frame for day trading?

Day traders focusing on one specific stock at a time consider using a combination of the 5 minute and 1 minute time frames. The 2 minute and 3 minut time frame is also often used, but the majority of traders use the 1 minute and 5 minute time frame. Therefore, when setups appear on the major ones, you will more likely see follow through on those time frames compared to signals on less often used time frames.

Traders who monitor more than 2 stocks at once, consider using a higher day trading time frame like the 15 minute chart. One of the most popular setups on the day trading time frames is the opening range breakout. That can be with our examples the 1 minute opening range breakout, the 5 minute opening range breakout, and the 15 minute opening range breakout.

Best Swing Trading Time Frames

60 Minute Chart

The 60 minute chart is still an intraday time frame but less frequently used by day traders since one trading session only consists of a few 60 minute periods. Swing traders often use the 60 minute time frame to zoom closer into the chart.

It is an excellent time frame to plan and execute orders more precisely. Higher lows and higher highs can be easier spotted, and swing traders recognize trend changes faster.

Daily Time Frame

The daily time frame is the go to place for all swing traders. Historical data for 10, 20 or even 30 years on a daily time frame is most often included for free in all major trading platforms.

It can be relaxing to look only at the primary trend analyzing the daily time frame. Combining analysis with any other time frame is unnecessary since new highs, trend line breaks, and many other setups get recognized by so many investors who analyze the higher time frames.

You can use candlestick charts on a daily time frame to analyze the intraday price behavior without an intraday chart. That’s pretty cool, and it saves time and money. For example, if a stock opened at its lows and ran up until the end of the trading day, you see a bullish green candle, and it is obvious that a strong uptrend characterized the day.

Weekly Charts

Weekly charts provide a clear picture of the overall trend health. You can define simple rules like “as long as the low of the previous week is not broken, the uptrend is intact.” And that is so true. Pull a weekly chart from your favorite stock and then set another lower time frame beside it. Now analyze the price behavior in the smaller time frames relative to the weekly time frame. You will recognize that the smaller time frame follows the direction of the higher time frame in many cases.

That’s especially true for higher swing trading time frames since institutions, automated trading systems, manually acting swing traders, and many other market participants monitor those price levels.

What is the best chart time frame for swing trading?

The best time frame for swing trading is the weekly chart. That’s because of the ultimate power of that higher time frame. You immediately see if a stock is trending or not. You can spot trend changes easily, and the follow through from trend break can be immense.

The weekly time frame can also be combined with a smaller time frame to optimize risk reward ratios and improve money management.

FAQ

What is the best day trading time frame for day-trading supertrend?

Most day traders prefer the supertrend indicator to be applied on a smaller time frame chart. That’s because market reversals can be spotted easier intraday.

What is the best time frame for day trading crypto?

The 15 minute charting time frame is best for day trading crypto. That’s because the bid ask spread on cryptos is high. Lower time intervals may cause too many trades, which may lead to disadvantages due to the high bid ask spread.

What is the best time frame for day trading forex?

In volatile market hours, the 5 minute and 1 minute time frame are best for day trading forex. In side-hours where volatility is low, the higher time frames like the 15 and 60 minute chart are more reliable for spotting the trend.

Is higher time frame trading better?

Yes. The higher the time frame, the more traders and investors spot trends, reversals and patterns. Breakouts from significant price levels have then a higher probability of follow through with dynamic.

Is technical analysis using multiple timeframes a good idea?

Technical analysis using multiple timeframes is a good idea if traders focus on one specific stock or asset. A combination of a 1-minute, 15-minute, 60-minute time frame and daily chart is often used to monitor one specific stock to perfectly time entry and exit.

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About the author: Alexander is the founder of daytradingz.com and has 20 years of experience in the financial markets. He aims to make trading and investing easy to understand for everybody, and has been quoted on Benzinga, Business Insider and GOBankingRates.