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Timeframes

Timeframe

Definition

The timeframe is the period each candle covers, such as 1 minute, 5 minutes, 1 hour or 1 day. Day traders often trade on a lower timeframe and check one or more higher timeframes for the trend.

Example

Suppose a day trader times entries on a 5-minute chart, where the 6.5-hour regular session prints 78 candles. Before buying a 5-minute breakout, the trader checks the 1-hour chart, which shows the same day in 7 candles, and the daily chart, where it is a single candle. If the 1-hour chart is making lower highs and lower lows, that breakout runs against the higher-timeframe trend.

Hypothetical numbers, for illustration only.

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A 5-minute chart labeled with this section's terms: yesterday's last candle closes at $100 and today opens at $104, a gap; a dashed box around today's first three candles marks the opening range; volume bars sit underneath; and a magnifier zooms into one candle with a long upper wick to label the wick and the body. A note at the top: each candle is 5 minutes.

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