Time frame trading is an important thing that should not be ignored by any investor or trader. The reason is, this time frame will be able to have a significant influence on the process of analyzing changes in stock trading prices.
Knowing the time frame in trading activity can also affect a trader's profit potential. Because when you can choose and determine the right time frame, it has the potential to make money in trading.
#Understanding What is a Stock Trading Timeframe#
A time frame is a specific period of time on a price chart that reflects the conditions and trends occurring in the market.
Time frame is a very important component in trading because it can be used as a means to confirm or reject changes in existing patterns to show trends simultaneously.
In general, time frames can take many forms. Starting from minutes, hours, days, even weeks or months. Each trader can choose a different type of time frame because it depends on the conditions and needs of the investment they make.
But usually novice traders will only activate the daily time frame, namely Daily (1H). So many novice traders tend to ignore bigger price swing trends like weekly (1W) or even monthly (M1).
Although this is not entirely wrong, it is better if you are more careful and wise in choosing a time frame. Armed with the selection of the right time frame, the trading process will be more optimal and effective.
Types of Timeframes in Stock Trading
After knowing what a time frame is, you also need to know its types. Because there are several types of time frames that are classified based on the time interval.
In general, trading time frames on financial market exchanges are divided into three different types. The three types are short term time frame, medium term time frame, and long term time frame.
1.Short Term Trading Term
As the name implies, this type of time frame is a time frame whose duration is relatively short. Usually the time period used can be every 4 hours, 1 hour, 15 minutes, and so on.
Given its relatively short duration, this time frame is quite widely used in day trading, intra trading, and or scalping.
The aim is to confirm about the main charts and also when is the right time to exit or enter the trading market.
2.Medium-term
The next type of stock trading time frame is the medium term. For this time frame, the time interval used can be several hours or daily. So the duration of the interval is longer than the short term.
The medium term time frame is generally used by swing traders to determine trading signals.
So they can determine the position and the maximum potential return from the transaction.
3.Long-term
As the name implies, this time frame also uses a very long interval in its time frame. The time frame model used can be weekly, monthly, or even yearly.
Position traders will generally use this type of time frame to see the main trends occurring in the financial markets. Armed with a time frame like this, traders will typically make fewer trades and have more time to do a detailed analysis of each trade.
Although there are several types of trading timeframes, in general, traders do not just stick to one type. Many traders use the multiple time frame strategy in the hope of making the analysis results more leverage and maximal.
For example, a long-term investor will use the weekly and monthly timeframes as the main frames. Apart from that, they will also use the daily time frame to correct the exit and entry positions of the exchange trades.
Thus, they can get a better position and profit in the transactions made.
Use Chartbit For Time Frame Trading
Chartbit is a Stockbit chart feature in performing technical analysis. This feature is free just by opening a stock account on Stockbit.
Opening a stock account without physical documents, 100% online and without a minimum deposit.
Chartbit provides various types of time frames, so you can analyze according to the time frame you are doing.
Choosing a Trading Timeframe in Stock Investment
Timeframe at Charbit
That is a complete discussion of the meaning of time frame trading and also the types commonly used by investors. Now with this discussion, you don't need to be confused anymore if you want to find the type of time frame for trading activities.