The time frame is an important aspect of trading. It is mainly based on the trader’s perspective. All time frames in trading have equal importance, and also they have its own advantages and disadvantages. Traders can be used their preferred time frame for trading. The commonly used time frames are M1(one minute), M5(five minute), M15(fifteen minute), M30(thirty minutes), H1(one hour), H4(four hour), D1(one day), W1(one week) and MN( monthly). M1 time frame is used for scalping. M5 and M15 are used for intraday. M30, H1 and H4 are used for short term positioning. And finally the D1, W1 and MN are used for long term positioning. These time frames are chosen according to the trader aspect. If you don’t have enough time to sit in front of the system viewing the market then avoid scalping trading because it need a keen observation power every time. The traders those have less time for trading can use the short and long term positions the calls generated in both the time frames will be chosen accordance with the scrip.
Scalping is a trading strategy specializing in taking profits on small prices. In this type of trading trader have a strict enter and exit strategies. We can cover up large loss by small gains by using the concentration power. In scalping we can use one minute time frame. Good scalp trader intends to take all small profit from every trade not let lost them. In these trading technique got more number of signals and we can enter it and exit with minimum profit. The main drawback of scalping is we have to watch the market every time because fluctuation is happened quickly. Large losses can be prevented by using a strict exit strategy. So many small profits can be easily compound into large gains.
The trading strategy is intraday trading and this is the most popular and commonly used time frame. If we buy or sell shares or stock in one single day then it is called intraday trading. The five minute and fifteen minute time frames are used for intraday trading. You should know all the current news and issues about share market and analyze the shares that you buy with more care if you want to Trade in Intraday Trading. The buy sell process is done so quickly. In intraday you have to buy or sell the stock in that single day. The intraday trading the brokerage is very less. The disadvantage of intraday trading is the fear of loss. If you done wrong analysis it may cause the revert action. As we cannot guarantee returns on our Investment in Intraday Trading you should be ready for loses that may occur when you Trade.
Short term positioning
In short term positioning we can use the time frames like M30, H1, and H4. These time frames are put according to your convince and the selected stocks. Short position is investment strategy in short period. Where the traders buy sell stocks in market in short period of time. If we don’t have to spend more time in market then it is the suitable time period. Short-selling is one strategy to use if you believe the price of the underlying asset will decrease in the future and you want to profit from and pocket from that loss. Short term position can be changed according to the market movements.
Long term positioning
A long term is the buying or selling of a security in long term by using the time frames like D1, W1, and MN. Long term positioning is buying of a stock or commodity for a long term period. Traders are buying a stock with an expectation of increasing the price. An investor will go long on a put option if he expects an asset’s price will fall, and similarly an investor will go for call option if he expects benefit from an upward price movement. In long term the traders buy the stock with an expectation of price rising with a long position investment, vice versa in case of sell. The main factor of long term investment is the ownership of the shares for a particular time.
If we are using multiple time frames it is difficult to concentrate particular scrip. There are lots of confusions are raised while using multiple time frames. For entry and exit on multiple time frames avoid entry in to your order execution. To identify commonality between multiple time frames use same criteria. So, if you are look forward for stocks trending strongly. Make sure you use the same criteria, i.e. if RSI is used in one chart use the same for trading in multiple time frames. After choosing the time frames we must stick on that particular time frame for particular time to execute the actions. The benefit of each time frame should be depended upon different matters. That is choosing the scrip. The current value of that scrip in market, and the time choose for selecting it for trading and there are lot of key points should be remember for the selection process of trading time frame.
If we are choosing a time frame we should know about the complete extract. With your convenience you can arrange the trading time and also aware of the current market changes and fluctuation of market. The time frame should be chosen according to market timing for MCX is better to choose intraday. In Forex it is useful to select thirty minute or hourly time frame because it is live in all day. If you are not able to choose the perfect time for you then take advice from a professional trader for your better trading. They can help you to choose the right time frame for you. Each field in trading is important in its own aspect.
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