44- Technical analysis: Timeframes

A timeframe is a period that a trader chooses to study the market. There are several timeframes in MetaTrader, you can find them in the special panel (to see it click View - Toolbars - Timeframes).

In MT4, the timeframes available go from 1-minute charts (M1) to monthly charts (MN).

Timeframes from M1 to M30 are known as small or low, while timeframes from H4 to MN are called large or big. H1 is somewhere in-between. 

If you open a small timeframe, you will see the dynamics of the price for only a small period of time, for example, one day if you look at M1. On the other hand, on the MN timeframe, you will be able to see how the price was changing during several years. 

Which timeframe is best for trading?

Traders often ask which timeframe is the best. There’s no universal answer to this question. Much depends on your trading style and the time you have for trading. In brief, if you have time to trade every day and are tolerant to stress, you can choose small timeframes where you will be able to make a lot of small trades. If you don’t have much time and want to avoid emotional situations, larger timeframes might be the best option for you. Find out more how to choose a timeframe for trading. 

Each timeframe allows you to have a different view of the market. 

On the one hand, smaller timeframes will let you see the price action in greater detail. If you are a scalper, i.e. a person who keeps a trade open only for several minutes, this is where you will need to work. 

On the other hand, if you want to make a bigger trade you will have to switch to bigger timeframes. First of all, you see the bigger picture of what was and what is happening in the market. Secondly, the price can make random moves on intraday charts. These moves are also known as “market noise”. Larger timeframes allow traders to filter these misleading changes of the price and make a trade decision on the basis of the really important information.

Notice that certain trading strategies may require using a particular timeframe or timeframes. Finally, remember that you are not limited to only one timeframe. On the contrary, multitimeframe analysis may increase the efficiency of your trading.