The Secret to Choosing the Perfect Time Frame for Trading

Jun 5, 2020

Apurva Sheth, Editor,Profit Hunter Pro

Aspiring traders have often asked for my views on charting time frames.

Which chart is the best - daily, weekly, intraday?

Well there is no 'one size fits all' answer. That's because every trader is different. We all have our own styles of trading with varying holding periods.

So, you will need to pick the correct charts based on what kind of trader you are.

In this video, I will show you how to do this.

Hi, I'm Apurva Sheth and I welcome you to this latest edition of Fast Profit Daily. A lot of times I get this question from investors and our readers and this question is common across everyone. What is the time frame that one should use for trading?

A lot of times I have been on the Equitymaster Conference and there, I have met a lot of investors who are just starting to trade. So after knowing the basic stuff of a charting, they get stuck with this question that what should be the ideal time frame for trading? So today's video will be all about that.

So, now when you are trading, there are a couple of things that you must know beforehand before you choose your time frame to check out the charts. So what are the things on which your time frame will depend upon?

So first thing is the kind of trading you want to do. So whether you are a long term investor, whether you are a swing trader, whether you are an intraday trader, your time frames will differ. Depending on were kind of trader you are, your holding period will also differ.

So apart from that, the percentage returns that you are expecting from trading. So these other 2-3 things on which the kind of time frame you will depend upon.

So let's assume that you are swing leader and you want to identify your perfect time frame for trading. So how should go about checking your charts? So as a swing trader, the holding period would very anywhere between 3 to 20 days and percentage returns that, as the swing trader, what you'd expect, would be anywhere between 6 to 20%.

NOW REVEALED: 5 Best Stocks That Could Possibly Surge Up to 300% In the Long-Term

Now the question is about the time frame. Where should you start with while looking at charts? So the obvious answer is it would be a daily time frame. You should check out the charts or the trends based o the daily time frame.

Now, I call this as your chart of choice. The daily chart will be your chart of choice. Now, when you are looking at the deterred, you must check for stocks which having momentum and if you want to buy stocks which are in momentum than you can scan the charts and see if the stocks are in the gainers list for the last 10 to 20 days.

If you are a member of the telegram channel of Equitymaster, then you would have noticed that I post regularly what I call the T20 list where I share stocks, which are in momentum and stocks that are breaking out along with the volume gainers. So, this list would help you identify such kind of stocks.

So now let's say what to identify a stock which is a moving up and it's in momentum. So you have a shortlist. Take your list of stocks. Now when you go through its daily time frame and when you are convinced that it is ready to move higher and you must buy it, the first thing that you must do is just hold on to your buying.

You must and definitely look at the stock's weekly chart and you must confirm whether the outlook that you are seen for the chart on the daily timeframe is also valid or is also confirming on the weekly time frame. So you must confirm the trend or the momentum of the stock first on the daily and then on the weekly time frame.

Once you are convinced that it's okay, the same stock is confirming the uptrend on both time frames you must go to a lower time frame. So you have gone from a daily to weekly and from weekly you must board to work intraday time frame.

Now the purpose of going on an intraday time frame is that you should check the levels the best points for entries and exits. So when you look at an intraday chart, you can look for 60 minutes candle or 30 minutes or 15 minutes. But you must go on a lower daily time frame and see where would be the best possible entry point, so that you get the maximum out of your stock.

So this is how you should go about picking time frames for your swing trades. You must first start with the daily time frame and confirm your view on the weekly time frame as well and if it confirms then, you must switch to a lower degree time frame i.e. an intraday time frame and look for the best possible entries as well as exits.

This works in the exit in the opposite case as well. If you want to, you have already held on to a stock and if you want to exit from the stock then an intraday time frame would give you a clear picture of where would be the best point to exit from the stock.

So that's how one goes about identifying the time frame, the best time frame to do your trading. So that's all from me for today. I hope you enjoyed watching this video and in case you did, then please like it, share it with your friends and family and help them become better traders too.

Also, as I told you earlier, Equitymaster has a Telegram channel as well where I post regularly our T20 list, which will help you identify stocks for buying. I post regularly so you can make the full use of it by joining Equitymaster's Telegram channel. It's absolutely free.

So that's all from me for today. I hope you enjoyed watching this video and do watch out for next week's video. There will be a lot of interesting stuff coming from us regularly. So don't miss out.

Thank you.

Stay safe and have a great weekend!

Warm regards,


Apurva Sheth
Senior Research Analyst, Fast Profits Report
Equitymaster Agora Research Private Limited (Research Analyst)

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