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Best Time Frame for Intraday Trading

To trade intra-day, you have to make quick decisions and execute your orders with the speed. You have to control the fascination of more money and not over-trade the stock market. When you do intra-day trading, you can’t trade with only a single time-frame chart. Technical experts look at a combination of charts of the same stock to take required trading decisions. Each chart is in a diverse time frame and provides the entire picture of the stock trends and movement.

For long-term intra-day traders finding the best time frame is very beneficial. Experienced intra-day traders can get a huge loss of their money if they trade outside of the best time frame for intra-day trading. This begs the question that what is the best time frame for intra-day trading?

Things to keep in mind while selecting the best time frame

Every trading decision is to be made on a few important factors. Such as the trend of the stock along with the major support and resistance levels to enter and exit the stock.

The trend of the stock

Trading with the trend allows you to profit quickly and does not hit stop losses frequently. To spot the trend of the market, you need to make use of the 60 min chart when trading intraday. This is the biggest time frame that you are using for a day trade and the prevailing trend of the stock can be examined from this time frame.

The support and resistance levels

These are major areas where there was a lot of inequality between demand and supply leading to a huge rally or a drop in price. These are high prospect trading zones. The 15 min time frame chart is used to find out the major support and resistance levels in order to enter and exit the trade. The use of the 5 min chart is to alter the levels to make it a bit smaller so that you do not have a big stop loss. These three time frames jointly let you make high prospect intraday trades in the stock market.

Can you trade in the First Fifteen Minutes?

One to two hours of the stock market being open is the best time frame for intraday trading. Most stock market trading channels open from 9:15 am in India. So, why not start at 9:15?

If you are a seasoned trader, trading within the first 15 minutes might not be as much of a risk. For beginners, it’s recommended to wait until 9:30. The reason behind this is that in the first few minutes of the market opening, stocks are likely reacting to the previous night’s news.

Seasoned traders may make some good trades within the first 15 minutes. They usually take advantage of extremely high or low price points and reverse it in the opposite direction.

To beginners who have no idea about the dumb money phenomenon, or the strategy employed by seasoned traders to push back against it, the market will appear highly volatile. Therefore, waiting until 9:30 is safer than starting at 9:15.

Dumb money phenomenon

Traders often will depict sharp price movements in a particular direction. This is called the “dumb money phenomenon.

Trading at the Opening of the Market

Volatility is not all bad. After the occurrence of initial extreme trades, the ideal amount of volatility for beginners arrives in the market. Keeping this point in mind, the time frame between 9:30 am to 10:30 am becomes an ideal time to make trades. Intraday trading at the starting of the market opening has many benefits:

  • The first hours are usually the most volatile, providing ample opportunity to make the best trades of the day.

  • The first hour provides the required liquidity to get in and out of the market. Liquid stocks are higher in volume so they can get sold off faster.

  • The stocks traded or bought in the first hour have been shown to be some of the largest moves of the whole trading day. If done correctly, it can offer the highest returns compared to other time frames during the trading day. If it is done incorrectly, losses can be very large.

  • After 11 am, trades mostly take longer and occur in smaller volumes. This is a bad combination for intraday traders who require to wrap up their exchanges before 3:30 pm. If you want more time, it’s beneficial to extend this session until 11 am. However, the strategy of limiting one’s trades to the first hour is better fitted to day trading.

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