Chart Timeframe: the Key that will Open Any Door
Timeframe and Its Types
Traditionally, let's start off by defining a term. A timeframe is a period of days, weeks, months on the chart that represents an asset’s fluctuations over a certain period of time.
There are numerous types of timeframes
m1, m3, m5, m15 and m30 - 1, 3, 5, 15 and 30 minutes, respectively;
H1 and H4 – 1 and 4 hours;
D1, W1, M1 – 1 day, 1 week and 1 month.
We recommend you to choose a timeframe depending on the type of trading. There is no "one timeframe fits all cases". A trader needs to learn how to work with charts in all time periods.
What Timeframes Should I Use for Crypto Trading?
As a rule, traders who close trades within 24 hours work on all minute timeframes. For example, on the m1, m3 or m5 charts, you can conduct a large number of operations, getting a small profit.
We must warn our readers: it's a very exhausting type of trading. You will have to constantly monitor the chart, looking for an entry point. Not everyone is ready to do this. If you are impatient and have an already disturbed mind, then this option is clearly not for you. The market behavior changes faster than a trader's opinion about the market. This is why day trading is so difficult.
Here, the execution of an order can take from several hours to several days. This trading tactic is more comfortable. It doesn't imply stress and nervous tension like in the previous case. The take profit of a single trade is much greater than in the day trading.
This type provides a chance to explore a variety of cryptocurrency pairs, predict the future and choose some of the most profitable options.
Last but certainly not least. The process is more like investing. Daily and weekly intervals are used here. Due to the relative youth of virtual currencies, the monthly chart looks uninformative.
The user opens a trade and forgets about it for a long period of time, hoping that the price of the purchased asset will skyrocket. This type of trading will not take much time. Therefore, it can be easily combined with any other type of activity.
Why Are Timeframes Important?
Incorrect work with timeframes can lead to losses. Now and then you will get a feeling that it is easier to earn on a short-term timeframe, since the chart moves quickly there. We are sorry, but that's not exactly true. The longer the time interval, the better the TA works, since there are less fluctuations in market prices on medium - and long-term timeframes.
Choose which option you like and don't forget that only the right combination of several assets and different timeframes can bring the best result. We will continue to introduce our readers with important concepts of the crypto market and trading – the best way to earn money online. So, this isn't a farewell.