Time frames

When you use technical analysis (TA), you primarily look at price charts. Using historical price movements, technical indicators, and patterns, you can predict future price movements. The price graph and the indicators can be used in different ways depending on the time frame you are looking at. You can set up the price graph according to different time frames based on how often you intend to make an entry or exit in an instrument. You will see the price movements in the chart in different ways depending on the time frame you use.

The most commonly used time frames for TA are:

  • 5-minute graph

  • 15-minute graph

  • One-hour graph

  • 4-hour graph

  • Daily graph

  • Weekly graph

  • Monthly graph

If you use "candlesticks" in the price graphs, the different time frames will show a "candle" for each unit of these frames. Let's say you have a time frame of 1 hour, then a "candle" in the price graph/chart will be the price movement over an hour, etc. You can then change the time frame in the price graph based on what trading strategy you have. The shorter time frames are most often used by intraday traders. Daily and monthly graphs are usually used by swing traders and fundamental investors.


Examples of using different time frames

It is also entirely possible to combine these different time frames. You can then, for example, use the shorter time frame to time an entry in an instrument, while you use the longer time frames to see that the instrument has the correct "setup". This has to be based on the strategy you have chosen to follow. See an example below:


An investor who is interested in investing in a silver instrument may after studying a price chart in the longer time frames, have found that it is trading close to a support line. This has proven to be a point where it typically turns based on historical movements.

If you thus zoom in on the chart with a lower time frame, you can see if the instrument is still in a steady downtrend, or has shown signs of reversing or bottoming out the trend. You can then wait until you see signs that the instrument is about to find a bottom in the shorter time frames before investing in it long-term:


Source: tradingview.com

As you can see from the weekly chart (price graph), silver has bottomed out around 22/23 dollars on several occasions. An investor who might consider buying the instrument may therefore buy when it reaches a price around these levels.


Source: tradingview.com

If the same investor had used several time frames, it could have been possible to get a better entry around 21.8 / 22 where you can see a change in the trend and character of the instrument at a lower time frame (picture above). By using several time frames, you can, as you can see, get a "safer" entrance. You can then wait to see that the instrument has changed the trend and created a bottom pattern, possibly creating an upward trend before you invest.

As you can see, time frames can be used for various reasons. Usually, they are used in different ways depending on the type of investor you are and the time horizon you are using for your investments. Regardless, it is often a good idea to combine different time frames to get a good indication of what trend the instrument you are interested in currently has. 

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