Intraday Time Period Analysis - All You Need to Know | Espresso

Intraday Trading Time Period Analysis

Intraday trading in the share market is one of the best ways of generating profits by leveraging the movement in prices of the stocks, shares, or assets. While trading in financial stocks, currencies, or commodities in a day trading, it is prudent to choose the correct time slot.

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But then, how can traders be sure of the time slot for earning better profits? How to find out which time would be the best for intraday trading? If you too have no idea about these questions, we can help.

Here, we will find out the best time for day trading through a time period analysis of the intraday stock charts. So let’s get right into that.

Intraday Stock Charts – How to Do an Intraday Chart Analysis?

As mentioned above, the success in intraday trading will depend a lot on the timeframe that an investor will choose to trade. Therefore, as a trader, you need to fully understand the concept of the intraday trading time period for figuring out the right placement of the trades.

In an intraday trading time period analysis, charts play a major role. For example, the intraday stock charts can depict the price movements from the start until the end of the trading day. So, a skilful intraday trader would always go for the intraday chart analysis to estimate future market trends and find out the short-term, mid-term, and long-term market analyses.

5 Intraday Trading Charts for Time Period Analysis

1. Hourly charts: The hourly charts in intraday trading represent the information of a single trading day. Here, the trading chart is broken into hourly sections. These are useful for analysing the short-term trades that last from a few hours and go up to a few days.

They display the opening price, closing price, and high and low prices of the stocks on an hourly basis for a set time period. Simply put, the hourly charts can provide a unique hour-wise feature of intraday trading.
Also Read: Open High Low Strategy In Intraday Trading

2. 15-minute charts: These charts show the price movements of stocks at an interval of 15 minutes. These depict the opening and closing prices, along with the high and low stock prices every 15-minutes.

Investors can use this chart to identify the short-term trends in the stock market. These charts can also give you an insight into the intraday trading positions and are quite useful for long-term trading analysis.

3. 5-Minute charts: This one is the most frequently used intraday chart. Investors can use this chart for both short-term and long-term trading analyses. This 5-minute chart is useful for the swift scalp, which lasts from minutes to hours during the intraday trading sessions. The long-term traders can use the 5-minute charts to select the best entry and exit points for initiating a trade for a longer period of time.

4. 2-Minute charts: These charts represent the stocks’ price actions for a few hours. It also represents the opening, closing prices, along with the high and low stock prices at an interval of every 2-minutes. For traders, the 2-minute charts could be very useful when looking for a short-term trading opportunity. Also, the short-term traders can use this chart for scalping, doing a time period analysis from a few trading hours to a few trading sessions.
Also Read: Strategies for Scalping Trading

5. Tick-trade charts: The last one is the tick-trade chart that represents the everyday trades that have been executed in the stock market. The traders can use this chart when the stocks exhibit a high liquidity level and show distinctive trends. In a highly liquid market scenario, the tick-trade chart will show continuous ticks. For intraday trading, these charts are suited for the trader who wishes to trade on large volumes of stocks.

Best Intraday Trading Time

The stock market experts suggest that anytime between 10.15 AM and 2.30 PM is the best time for intraday trading. This is because the morning stock volatility tends to subside by 10.00 AM to 10.15 AM. Hence, it becomes the perfect time to place an intraday trade.

Going by this logic, for traders, it could be a good idea to square off their intraday trading positions by 2.30 PM, which is much before the official square-off timings of the market. This way, they can ensure that they don’t pointlessly get trapped during periods of high volatility.

Conclusion

Now that you have an idea about the perfect intraday trading timing, you can go ahead and try your luck in the same. This will also help you minimise your trading losses and gain quick profits.

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Frequently Asked Questions

The types of intraday trading charts for time period analysis are hourly charts, 5-minute charts, 15-minute charts, 2-minute charts, and tick-trade charts.

A day trader or an intraday trader is the one executing short and long trades for capitalising on an intraday trading market price action, which results from the temporary supply and demand of the stocks.

An intraday trading chart is a graph representation of different data points, where each of the points represents the stock’s price action for a day trading.