Let me
straight away get to the point that there is no such thing as BEST time frame
for trading. It will always vary from person to person. That’s why I would urge
you to stop looking for an answer to this question. You have to select the time
frame that suits your personality, your psychology and it should be curated
according to the time that you can devote to the screen. It’s not a one size
fits all thing. Moreover, if you are copying some other trader’s trading style
and time frame just because that trader is very successful, it won’t be a very
good idea. The time frame that suits him or her might prove to be a disaster
for you!
One of my Twitter follower once told me that
he trades only in the first hour of the market opening simply because he is
free at that time and after that he has to go for his job. That’s not a very
good way of trading I guess! The market will not work according to our convenience,
we won’t get the right trades at the time which suits us. There is a
possibility, but the odds won’t be in our favor.
So the time
frame should be selected according to our trading style. Like for me, I
personally prefer an easy trading approach and I don’t like being glued to the
screen and watching each and every tick.
I rather
prefer to do the homework once the market is closed and often I prefer doing
extensive research and analysis during the weekends. So, during the market
hours I just place my trades if I have to and watch the market for just 1-2
hours in a day.
That’s the reason I have free time to reply to people online
and I get time for myself too. This also helps me to easily follow my passion
of doing something creative like making videos for YouTube or writing blogs.
It’s
not that I didn’t try intra-day trading, in fact, I spent a lot of time trying
to master intra-day , but I realized soon enough (and , after a lot of losses)
that intra-day is not my cup of tea. I still do intra-day some days when the
setup looks attractive but with a very limited capital and fixed stop loss.
I prefer
that end of day analysis to be one of the most simple but most difficult to
follow strategy. It’s simple because it reduces the volatility and we can stay
from roller coasters of the market and, on the other hand it’s difficult
because once we decide to see markets only after closing, we sometimes feel
bored and tend to trade just for the sake of doing “something “, which
generally results into losses, revenge trading, over trading and so on.
So, the “best”
time frame for trading should be selected according to our lifestyle, time
available for trading and personality.
We should
ask the following questions to ourselves before deciding the time frame that
might suit us:-
a) How much time can I spend in front
of the screen?
b) Do I have a full time job or is
trading my only source of earning?
c) In my trading experience, when have I
felt more comfortable and relaxed?
(trading 5-15 min charts, hourly charts, daily or weekly charts )
(trading 5-15 min charts, hourly charts, daily or weekly charts )
d) Do I have the patience, discipline
and conviction to ride the trend for days, weeks or even months?
e) Do I feel the urge to book profits
as soon as I see them (scalper mindset)?
Write down
the answers to these questions on a piece of paper and try to derive the best
time frame that suits “You” and then stick to it with conviction. Please note
that just because you have chosen a time frame that suits you doesn’t means
that you won’t make losses, it’s just that you will feel more comfortable and
relaxed and the trading would be worth it!