How To Pick The Right Trading Timeframe For Your Trading Style

in LeoFinance2 months ago

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Every trader is different. Everyone has a different trading style, or you are trying different things to find your trading style. Different styles have different timeframes that are used on their charts. You are going to have to play around and find the timeframes that work for you and your trading style.

Low Timeframes Equal Faster Paced

This seems simple, but people don't realize just how fast-paced the lower-term time frames can get. When trading on the lower term timeframes, you are playing on the 1- to 30-minute charts. This range of time is good for those who like to scalp trade or play intra-day swing trades.

When I am trading on the lower term timeframes, I am usually executing quick trades that I am in and out within an hour, or if I am catching the beginning of a trend, I might let it run throughout the day. My style of trading is day trading. I do not go to sleep with a high-leverage trade open. I get too stressed and lose sleep, which screws me up for the next day. The lower-term time frames allow me to be more active, which gives me that sense of hard work. You can also look at it as playing a video game that pays, lol.

I will let a low-leverage swing trade play out overnight, or even over a week. That is when I play on the higher timeframes.

Higher Timeframes Equal Slower Paced

For those that are not want to sit in front of the charts and are forced to make quick decisions, there are the higher term timeframes. The 1-4 hour and the 1-day to 1-week timeframes are popular among what we call swing traders.

Swing trading is for those that have other things they want to do, have a full-time job, or just want to sit back and make bigger percentages on bigger moves.

Swing traders are those that are in a trade for at least more than 24 hours in the crypto world and many will hold trades for weeks or months. Anything longer than that, then you are considered a position trader which is basically an investor.

When To Merge Short Term and Higher Term Timeframes

There are times when it is wise to be able to trade different strategies at the same time. This can be where you are seeing a longer-term trade on the charts, but you want to still play short-term scalps in the meantime.

For example, I use this strategy quite a bit. I may see something big brewing in the higher-term time frames that I would want to make a play on while I still trade in the short term. This is where I will do something like make the longer-term trade on low leverage and then scalp with higher leverage. For me, many times I will use this strategy to trade Bitcoin for a longer term and then use Ethereum as my scalp trading asset during that time. This way I am not getting my trades confused, lol.

Finding The Right Timeframe For You

As a trader, finding your strategy and game plan is one of the most important things to have a grasp on before you enter the markets. It's wise to spend time in the charts and just make imaginary trades on paper and see how your different strategies would play out. Everyone is different, so therefore everyone will trade different.

You cannot always go buy what all these trading 'gurus' out there say. What they preach may work for them, but it may not work for you. You may not be as A.D.D. as I am and cannot handle being in the charts and scalp trading on the faster times. You may be great at swing trading though. For me, swing trading only is BORING, lol. I have to mix a swing trade with some intermediary scalp trades. But that works for me, and it has taken me a while to figure that out.

No Matter What Happens, Look For The Lessons To Be Learned

No matter how frustrated you get trading these markets, you want to just make sure you are learning not only from your losses but from your wins as well! You want to make sure you are evaluating every trade to find areas of opportunity to get better and better. That is what I love about trading, there is always something to learn.

Until next time everyone...

Be Cool, Be Real, and always Abide!

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Nothing said is financial advice.

This is for educational and recreational purposes only!

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If someone wants to do intraday or mico intraday trading, he has to do it in a lower timeframe. To understand the overall movement of the market, a high timeframe can give a good picture. Then you can move into a lower timeframe for defining your entry point, profit target, and stop loss.

Yes, day trading is exciting and stressful. Do what suits you. :)

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