Timeframe
So, hello, let's figure out what a timeframe is and what it is needed for. Since I am only talking about my method and what I personally watch, you may disagree with some points and that's okay.
Any market produces a stream of data on open orders and executed transactions, and in order to somehow visualize the past information, they came up with the idea of depicting it in graphical form, in the form of graphs.
Graphs can be linear, bar or the most common, candlestick chart.
A candlestick chart, in my opinion, most clearly shows what happened to the price per unit of time of candle formation, its maximum, minimum, the opening and closing price of the candle.
And smoothly move on to the concept of timeframe.
A timeframe is a time range during which a candle is formed on a chart. The most common are M1, M5, M15, H1, H4, D1.
As you might guess, M(minutes) is a minute, H(hour) is an hour and D(day) is a day. The number denotes the period of candle formation.
The higher the timeframe, the more time period we cover on the chart. So, on the D1 chart, you can evaluate the global movement over a fairly long period of time. On H1, you can already track how the price is formed during the day, the most important levels and assume the presence of large market players. On the timeframes M1, M5, you can already examine in detail the behavior of the price over a short period of time.
Since I trade exclusively during the day, the most relevant timeframes for me are M5, H1, D1. The most common, since most traders watch them and this is enough to evaluate the chart and what is happening on the market.
Any market produces a stream of data on open orders and executed transactions, and in order to somehow visualize the past information, they came up with the idea of depicting it in graphical form, in the form of graphs.
Graphs can be linear, bar or the most common, candlestick chart.
A candlestick chart, in my opinion, most clearly shows what happened to the price per unit of time of candle formation, its maximum, minimum, the opening and closing price of the candle.
And smoothly move on to the concept of timeframe.
A timeframe is a time range during which a candle is formed on a chart. The most common are M1, M5, M15, H1, H4, D1.
As you might guess, M(minutes) is a minute, H(hour) is an hour and D(day) is a day. The number denotes the period of candle formation.
The higher the timeframe, the more time period we cover on the chart. So, on the D1 chart, you can evaluate the global movement over a fairly long period of time. On H1, you can already track how the price is formed during the day, the most important levels and assume the presence of large market players. On the timeframes M1, M5, you can already examine in detail the behavior of the price over a short period of time.
Since I trade exclusively during the day, the most relevant timeframes for me are M5, H1, D1. The most common, since most traders watch them and this is enough to evaluate the chart and what is happening on the market.
D1 I look at the overall picture of the market, the main trend and possible movement for the day.
H1 I look at where the price closes at the end of the hour, whether there were any movements within the hour and the volume of the candles themselves.
Well, and the most important M5. A kind of microscope, we look at where the price is, where there will be possible movements and local levels. Since this timeframe is also the main one for most traders, I always look at it, all trading decisions are made based on this timeframe.
The choice of timeframe depends only on the trading style. If you are an investor, then large timeframes will suit you, so as not to be distracted by the price noise during the day. If you trade during the day, then small timeframes will help you get your bearings faster.
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