Best Time Frame for Intraday Trading
Expert traders believe they should confine intraday trades to a few important hours of the day instead of buying and selling stocks throughout the day. Thus, if you are starting to trade intraday, you must identify the best time frame for intraday trading.
Traders who engage with stocks, ETFs, and index futures have realized that dedicating one or two carefully planned hours to trading helps them gain significant profits.
In India, trading platforms start sharing stock rates at 9:15 AM. So, is this the time you should start? If you are a professional trader, it is risky for you to trade in the first 30 minutes. But beginners should wait till 9:45 AM.
Equities respond to the previous night’s updates during the initial minutes of market opening. There are chances of severe price fluctuations. After the initial movements in share prices, volatility reduces, giving newbies the chance to enter the market. Consequently, the best time frame for intraday trading is from 9:30 AM to 10:30 AM.
Is it better to trade in the first half or second half?
It is tricky to answer this question. Statistically, most of the profitable trades exist in the morning half of the day. Retailers are accepting the news coming in for the day during this time.
The second half of the day focuses on trend reversal or continuation. At this time, you can use the profit you earned during the first half and make additional trades.
Choosing the best intraday trading chart time frame
Several traders claim that the 5-minute and 15-minute time frames are the best chart time frames for intraday trading. Many software also provides system-based 1-minute and 30-minute charts. However, they are either too slow or too volatile.
Some traders rely on a 30-minute or 1-hour time frame to make a trade. But, when making intraday profits, the most effective time frames are the two mentioned above.
Intraday traders are of two types - scalpers and day traders.
- Scalpers: Scalpers focus on a small profit and make multiple trades. They have around 10 to 15 trades in their trading account in a day. Consequently, the time frame that they can make the most of is a lower time frame, such as 3-minute or 5-minute. For scalpers depending on any indicators in their intraday trading strategy, the lower time frame is best suited. On the other hand, if you depend on the candlestick chart patterns, then the bigger time frame is more suitable. Price action-based chart patterns require time to generate.
Also Read: Scalping Trading
- Day traders: Day traders are swing traders. Their focus is a single trading day. Therefore, they do a maximum of 2 to 3 trades throughout the day. After that, they follow the trend for that stock. For day trading, 15-minute charts and 30-minute charts are the best. Day traders who use indicators in their day trading strategy can use a 15-minute or lower time frame. In the case of price action-based trading, a combination of the 15-minute and 30-minute time frames is the best.
How do professional traders choose a trading time frame?
Experienced traders choose a trading time frame in 30 seconds. Their choice doesn’t depend on the trading system, technique, calculations on the intraday profit calculator, or the market. It depends on their trading personality.
Traders who make multiple trades in a day might go ahead with a shorter time frame. On the contrary, those who make only a few trades in a day might pick a longer time frame. Some traders also switch their time frame on a particular day depending on their trading activeness.
The best time frame, if utilized properly, can result in the strongest intraday profits as compared to other time frames during the entire day. However, if you don’t do it properly, you can incur substantial losses. After 11:00 AM, trades need more time and happen in smaller volumes. If you require more time, you should extend the time till 11:00 AM for the first half.
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Introduction to Intraday Trading
Also known as day trading, intraday trading refers to the purchase and sale of stocks and other financial instruments within the same day. There's no change in the ownership of shares due to these trades once all the positions are squared-off before the market shuts.
Frequently Asked Questions
It is not possible to earn profit every day with intraday trading. The chance of earning profit or incurring loss is always 50-50.
Some essential tips to keep in mind while using your intraday trading account are:
- Trade only after proper analysis
- Always use stop loss
- Adhere to a few methods while trading
- Take note of the entry and exit
- Use only one method for every trade
Time frame refers to the length of time of a single price bar on a chart. For example, on a 5-minute trading chart, each candle contains the opening, closing, high and low price of that 5-minutes. When you see a 1-minute time frame chart, you see a new candle forming every minute.
In India, some experts consider the best time frame for intraday trading to be from 9:30 AM to 10:30 AM and from 2:30 PM to 3:15 PM.
It depends on your risk appetite. Some days will be unfavourable, and you must be prepared for them.