Daily charts, which reflect price fluctuations over a one-day period, are the most widely used charts in intraday trading. These are useful for studying short and medium-term time periods; however, some traders may use them to analyze long-term time periods. Daily charts are used for analyzing periods longer than six weeks, according to the thumb rule.
They aid in a more accurate assessment of stock movements, providing a clear picture of stock performance. This aids in the proper planning of trading strategies.
What is Intraday Time Analysis?
Making the proper move at the appropriate time is the key to intraday trading success. You need to first get a thorough understanding of the intraday trading time frame before determining how to execute intraday transactions. Charts are the primary source of reference in intraday trading time analysis.
Intraday charts show price change from the beginning to the end of the day. A skilled intraday trader studies the chart to forecast future market patterns and does not rely on tips excessively. For short-, medium-, and long-term market analysis, traders employ trading charts.
Types of Intraday Trading Charts
These charts are quite famous in the trading world since they show the price movement between the starting bell and the closing bell of the daily trading session. Intraday charts can be utilized in various different ways. The following are some of the most regularly used charts in Indian stock market intraday trading:
1) Hourly Charts: | These graphs show the price changes of a single stock over a set period of time. Within the boundaries of a single trading day, this includes precise information. Each candlestick or bar represents the beginning, end, high, and low of each hourly interval for the time period under consideration. These are typically used for short-term trades that last anywhere from a few hours to many days. |
2) 2-Minute Charts: | Another famous intraday chart among stock market traders is this one. This chart shows the price fluctuation over a period of hours on the same trading day. During the set time period, each candlestick displays the opening, closing, high, and low at two-minute intervals. These charts are best for day trades or scalping, which can last anywhere from a few minutes to several hours in a single trading session. |
3) 5-Minute Charts: | This is one of the most popular trading charts. It depicts the index's or stocks' price fluctuations over a specific time period. The opening, closing, high, and low of five-minute intervals throughout the chosen time period is represented by each bar on the chart. During a trading session, these charts are typically used for rapid scalps that last anywhere from a few minutes to several hours. Long-term traders use this type of chart to find and choose the most efficient entry and exit points when starting trades over a longer period of time. Using the intraday five-minute chart for long-term stock market investment can be a good intraday tip for those looking to invest for a longer time frame. |
4) 15 - Minute Charts: | These charts illustrate a stock's opening, closing, high, and low price fluctuations at 15-minute intervals. The 15-minute charts are frequently used for day transactions that last between an hour and many trading sessions. |
4) Tick-Trade Charts: | These are line graphs that reflect every deal made on the stock market. When using these types of charts, traders must remember that time is irrelevant and that each point on the chart indicates a completed trade. The chart is shown as a flat line if the markets are illiquid. The ticks on highly liquid market charts are continuously shifting. While intraday trading, the chart is useful for tracking every executed transaction with a line across time that travels up or down to display the stock price movement quickly. Traders use tick charts for scalping and to keep track of 'out-of-money trades that need to be corrected. |
Importance of Intraday Trading Charts
Charts are a good tool to analyze data in a short time frame. It assists day traders in judging the market trends. Both the long-term and short-term investments are directed through day charts. The most crucial aspect of the chart is to get insights into the market behavior of a specific stock.
Check here BSE and NSE Timings
The Best Time Frame for Intraday Traders
The ideal time for intraday trading, according to stock market analysts, is between 10.15 a.m. and 2.30 p.m. This is because by 10.00 a.m. to 10.15 a.m., morning stock volatility has subsided. As a result, it is the ideal opportunity to place an intraday transaction.
According to this logic, traders should square off their intraday trading positions by 2.30 p.m., which is far earlier than the market's official square-off times. In this manner, they can avoid becoming trapped unnecessarily during instances of extreme volatility.
FAQs
Daily charts, which reflect price fluctuations over a one-day period, are the most widely used charts in intraday trading. These are useful for studying short and medium-term time periods; however, some traders may use them to analyze long-term time periods.
What is the best time frame for intraday trading analysis? ›
Many experts suggest that 10.15 AM to 2.30 PM is the right time to conduct intraday trading. Morning volatility usually tends to subside by 10.00 to 10.15 AM, making it the perfect time to place intraday trades.
What is the best analysis for intraday trading? ›
Best intraday trading indicators
- Moving Averages: ...
- Bollinger Bands: ...
- Momentum Oscillators: ...
- Relative Strength Index (RSI): ...
- Moving Average Convergence Divergence (MACD) ...
- Stochastic Oscillator. ...
- Commodity Channel Index (CCI)
In intraday trading time analysis, charts are the major source of reference. The intraday charts depict the price movement right from the start to the end of the day. A skillful intraday trader always studies the chart to estimate the future market trends, he/she does not excessively rely on tips.
What is the best TF for intraday trading? ›
Several traders claim that the 5-minute and 15-minute time frames are the most preferred chart time frames for intraday trading. Many software also provides system-based 1-minute and 30-minute charts. However, they are either too slow or too volatile.
What is the 10 am rule in the stock market? ›
Some traders follow something called the "10 a.m. rule." The stock market opens for trading at 9:30 a.m., and the time between 9:30 a.m. and 10 a.m. often has significant trading volume. Traders that follow the 10 a.m. rule think a stock's price trajectory is relatively set for the day by the end of that half-hour.
What is the best moving average period for intraday trading? ›
The 10-day moving average plotted on an hourly chart is frequently used to guide traders in intraday trading.
What is the 11am rule in trading? ›
It is not a hard and fast rule, but rather a guideline that has been observed by many traders over the years. The logic behind this rule is that if the market has not reversed by 11 am EST, it is less likely to experience a significant trend reversal during the remainder of the trading day.
Which time candle is best for intraday trading? ›
Many experts state that the time frame between 9.30 am and 10.30 am is the best for intraday trading. Trading during these hours is considered beneficial. Intraday traders should avoid trading for the entire day because they might not be able to get sufficient rewards.
What is the 3 30 formula in trading? ›
The Nifty 50 3-30 formula is a simple rule of thumb used in stock market investing. It suggests that investors should have a diversified portfolio of at least 30 stocks, with no more than 3% of their portfolio invested in any one stock.
The secret to successful intraday trading lies in the high leverage and margins that traders enjoy. Leverage and margins help amplify profits (as well as losses). But the trick lies in not getting greedy once that target is reached. Don't wait for the stock price to increase further if it has reached your target price.
Which intraday pattern is best? ›
The shooting star candlestick is primarily regarded as one of the most reliable and one of the best candlestick patterns for intraday trading. In this type of intra-day chart, you will typically see a bearish reversal candlestick, which suggests a peak, as opposed to a hammer candle which suggests a bottom trend.
Which is the best momentum indicator for intraday? ›
Top Momentum Indicator: MACD (Moving Average Convergence-Divergence)
- The MACD Line: this is the slow moving average subtracted from the fast moving average. ...
- The Signal Lane: This is the “slow-line,” it's just a moving average of the MACD line. ...
- The Histogram: The histogram subtracts the Signal Line from the MACD Line.
It is an easier strategy to manage risk while it is a good thing to identify trends. Therefore, for scalpers, we recommend that you use extremely short timeframes like 1-minute, 5-minute, and 10-minute. For regular day traders, the best time frames are 5-minute, 15-minute, and 30-minute charts.
Which time frame is best for scalping? ›
Beginners generally trade around the 5 minutes time frame to strike the right advantage. However, advanced traders can go with 3 minutes trade precisely. Scalping is an intraday trading technique where an asset is bought and sold within a few seconds to a few minutes to capture microscopic price movements.
What is the best time frame for swing trading? ›
The best timeframe for swing trading includes 1-hour, 4-hour, and daily timeframes. Here's why: 1-hour charts: Short enough to give you intraday insights but long enough to help you spot broader swings. 4-hour charts: A balanced point of view for identifying short-term and medium-term trends.
How long does it take to become a successful intraday trader? ›
Many people put in multiple years before breaking into consistent (or even any) profitability. It takes at least a year to consistently make money from day trading or swing trading, if working at it full-time or with a mentor, and only working one (maybe two) strategies. Six months is the quickest; most take longer.
