Timeframe
The period each candle on a chart represents, from one minute to one month.
Also called: time frame · chart interval
In plain language
Timeframe determines what you can see. A five-minute chart shows noise the daily chart smooths away; the daily chart shows structure the five-minute chart cannot contain.
Most approaches use more than one: a higher timeframe for context and direction, a lower one for entry timing and stop placement.
Timeframe also sets your stop distance, and therefore your position size. The same idea on a 5-minute chart and a daily chart are completely different trades.
Why it matters
Choosing a timeframe is choosing your typical stop distance, holding period and trade frequency all at once. Switching timeframes mid-trade is how a small loss becomes a large one.
Common mistakes
- Entering on a low timeframe and then justifying the losing position with a higher-timeframe chart.
- Using a stop distance from one timeframe with a target from another.
- Watching a timeframe far below the one the plan was built on.
Keep exploring
These concepts are connected. Understanding one usually makes the next one easier.
A sustained directional bias in price, built from a repeating pattern of highs and lows.
A chart element showing the open, high, low and close for one period.
The gap between your entry and your stop loss — your risk on a single unit.
The pattern of highs and lows that describes whether a market is trending or ranging.
A written set of rules defining what you trade, how you size it, and when you exit.