Q. Which Time Frame is Best For Intraday Trading?: Intraday Trading charts are very popular among the traders to know the market trends. The charts are the major tool for intraday time analysis. Day charts depict the price movements between opening and closing of the market. Let us get familiar with all the different charts and their applicability.
The day trader uses the charts for the long term as well short term market study. Active traders study the day charts for scanning the markets.
Intraday Chart – Benefits & Importance
Charts are a powerful tool to analyze data in few moments. It is helping day traders to judge the market trends. Both long-term and short-term investments are directed by the day charts. The most important aspect of the chart is to gain insight into the market behavior of a particular stock.
The Best Intraday Trading Time Frame
There are multiple methods to use the daily charts. Here are the most common charts.
Hourly charts show price movements of a certain stock for a certain time duration. The information reflected in the chart is one trading day data. Each of the bar in the hourly charts indicates movements noted at the interval of every hour. Hourly charts are popular for short term trading.
15 Minutes Chart
The 15 minute charts are beneficial for an hour or few sessions of trading. This chart shows high and low of price movements of stocks for 15 minutes intervals.
Five Minute Chart
Five minutes charts bar indicates high and low and opening and closing of five minutes duration. These are the most commonly use day trading charts. The 5 minutes charts used for the short term as well Day Trading. This Time frame is the best time frame for Intraday trading stocks .
Two Minute Chart
Two minutes chart is very popular in the stock market for same day trading. This chart represents price fluctuation for some hours. The bars indicate opening and closing as well low and high at an interval of two minutes for the specified time.
Tick Trade Charts
Tick trade charts are line charts that draw a new bar after a specific number of trades. The above given charts are conventional time based charts. The time-based charts create a new bar after a specific time period. But tick trade chart bars inform data after every set of trades. I.e. after a set of 1000 number of trades.
Types of Charts
There are three types of charts for reading day markets.
- Line Chart– Line charts provide a quick overview of the stock during a particular period. They are popular among traders who give high importance to the closing point.
- Bar Chart – Bar charts are common for detail technical analysis of the stocks. Traders use vertical as well horizontal bar charts to get closing and opening values. They are also used to trace highs and lows.
- Candlestick Chart – Candlestick charts are like the bar charts. These are simple yet strong charts use by the professional stock traders. Candlestick charts also offer an easy interpretation of information. Candlestick charts is best chart for Intraday Trading.
Know About More: Technical Analysis of Stocks
The day trading needs lots of data to be scanned and process. Traders also rely on the modern software for reading charts. Charts and time analysis are important to protect your investments with best judgments.