Best Time Frame for Intraday Trading, Swing, and Positional Trading-Explained

Trading can be risky, and making money through trading can be challenging. However, many people find the risk and challenge worth it and Start trading without knowledge of strategies and systems. When they fail to make money through trading or after blowing accounts, most of them quit, and only a few start working on their system and different strategies.

While working on the system and strategies, they found many questions. Questions like what is risk management, what is a risk to reward ratio, and what is time frame, etc.

In this article, I will focus on time frames and try to answer questions like the best time frame for intraday trading, best time frame for swing trading, and best time frame for positional trading. But before that, If you aren’t familiar with Intraday, Swing, or Positional trading, let me explain in short.

Different Types of Trading

Intraday Trading

Intraday trading means buying and selling stocks, derivatives, etc., on the same day. This sort of trading is usually done by day traders, who buy and sell stocks multiple times throughout the day to take advantage of small price changes. Intraday trading can be risky and lead to significant profits if done correctly.

Swing Trading

Swing trading is a method of trading that involves holding a position for a while, usually a few days to a few weeks, in the hopes of profiting from price swings. Many swing traders use technical analysis to identify market trends and potential trading opportunities.

Positional Trading

what is positional trading? – Positional Trading, also known as investing, positional trading means when we buy a stock and hold it for months or years. We exit when we make a good profit out of it.

These are the most commonly known types of trading, but one more type can be sub to intraday trading, called Scalping. Scalping is the most quick-paced type of trading.

Scalping meaning in trading – traders buy and sell stocks within seconds or minutes. Scalpers look to make small but quick gains, and they trade when they spot a profitable opportunity.

In short, ‘Scalping’ and ‘Intraday’ trading involve entering and exiting positions on the same day. Swing trading is for short to medium-term positions. And positional trading is usually for medium to long-term positions.

Best Time Frame for Scalping

As I explain above, Scalping in the stock market means entering and exiting within a few seconds or minutes. Therefore, the most commonly used timeframe for scalping trading is between 1 to 5 minutes. Traders use the 1-minute timeframe to analyze as well as enter the trade. And also, use the 3 and 5-minute timeframes to enter and exit the trade.

Some scalpers use the 15-minute timeframe, but few go beyond that. Trades are taken for such a short time that it doesn’t make sense to use a 30-minute timeframe or higher.

There are so many 1 minute trading strategy available for Scalping, but it needs another article to explain them adequately.

Best Time Frame for Intraday Trading

Choosing the right and best time frame for intraday trading is essential for your intraday trading strategies. So most Intraday traders (also known as day traders) choose time frames between 5 minutes to 1 hour.

Most traders say the 5-minute and 15-minute time frames are the best chart time frames for intraday trading. The 5-minute time frame is most often used to enter and exit trades, while 15 and 30 minutes are used to monitor the trend or price action. And the 1 hour time frame provides a broader view of the market. 

The 1-hour timeframe is also helpful in finding significant levels, such as support and resistance. An intraday trader also uses a daily timeframe to check the shape of the candle, which shows the overall market trend.

It is usually more profitable to take trades by following the market trend. For example, if the stock price is in an uptrend, it is good to go for buying side rather than shorting (selling).

Remember, It is more difficult to swim against the wave and easier to swim in the direction the wave is moving.

In India, the stock market is open for 6 hours and 15 minutes, from 9:15 AM to 3:30 PM. So an intraday trader’s goal is to find a profitable setup, take the trade, and exit within that time frame. And make maximum profit in intraday trading.

Understanding time frames help to find best stocks for intraday trading. There are so many intraday trading strategies available, but it needs another article to explain them adequately.

Best Time Frame for Swing Trading

Swing trading is a less stressful way to trade than scalping or intraday trading. In swing trading, you don’t need to worry about getting in and out of trades quickly or watching the markets constantly. 

It’s different from scalping or intraday trading, having to find daily stocks and trade. In swing trading, you will find swing trading stocks for days or months and trade them when they trigger your entry criteria.

The commonly used time frame for swing trading is the ‘Hourly’ and ‘Daily’ chart. The ‘Hourly’ Time frame is mainly used to take entry and exit, and the ‘Daily’ time frame is used to watch the market move.

If I see an opportunity for a swing trade, I’ll look at the hourly and daily charts to see which trend is going and where the critical support and resistance levels are.

So primarily used swing trading time frames are ‘Hourly’ and ‘Daily,’ but it depends on the type of setup available to trade and how many days it can take.

Swing Trading – 1 hour to enter + Daily to watch

Best Time Frame for Positional Trading

As I explain above, positional trading means investing money in a company’s stock for the long term. This type of trading is based on believing that a company’s stock will eventually rise and give good profit in the future.

Mostly for Positional Trading or Investing, traders/investors use both ‘Technical’ and ‘Fundamental’ analysis. 

Technical analysis is a method of predicting future market trends based on past price patterns. Fundamental analysis is valuing a stock by analyzing the company’s financial statements.

Positional trading generally uses a longer time frame than other types of trading, such as day trading or scalping. Time frames such as Daily, Weekly, or longer are standard for positional trading.

Positional trading – Daily, Weekly & Monthly timeframe

Indian Stock Market Timings

The Indian stock market can be broadly divided into three segments based on time – pre-open, open, and post-open.

The equity segment of the market is open for trading from Monday to Friday, except for holidays announced by the Exchange. The overall market timings of the equity segment are:

A) Pre-open session

•  Order entry & modification Open: 09:00 AM
•  Order entry & modification Close: 09:08 AM

B) Regular trading session

•  Market Open: 09:15 AM
•  Market Close: 03:30 PM

C) Closing Session 

•  The Closing Session is held between 03.40 PM and 04.00 PM

D) Block Deal Session Timings:

•  Morning Window: between 08:45 AM to 09:00 AM.
•  Afternoon Window: between 02:05 PM to 2:20 PM

Conclusion

If you are new to trading, selecting a time frame that fits your trading style is essential. Some traders prefer to trade in short-term time frames, while others prefer to trade in longer-term time frames. There is no right or wrong answer; it is simply a matter of finding what works best for you.

I prefer day trading because I like the challenge of trying to make a profit within a concise time frame. I generally use 5 minutes to 1-hour timeframe when I trade, as this allows me to make quick decisions and take advantage of short-term market movements.

Do share your views in the comment section below.

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