- 1 What Is Swing Trading?
- 2 What Is Time Frame in Swing Trading?
- 3 What Time Frames Should a Swing Trader be Tracking?
- 4 Different Time Frames for Swing Trading
Swing trading is a popular trading option for many traders. One of the main reasons behind it is the availability of information. You have numerous charts and analytical tools to execute swing trading strategies. And in return, you can gain formidable profits from your investment.
But still, finding the best time frame for swing trading is crucial. There are various time frames to look into. But which one is the most suitable for a swing trader?
Let’s find the answer here.
What Is Swing Trading?
Swing trading is a unique concept of currency trading. It is a trading style to capture financial instrument gains. Traders usually capture the gains over a few days or even weeks.
The primary swing trading technique investigates currencies on 4 hours to daily charts. Swing traders use different swing trading indicators to determine strategies. The analysis from the technical indicators guides them to make trading decisions.
Swing trading is a preferred option for many beginning traders. This is because swing traders can gain profits from very few monthly trades. Thus, they don’t have to overtrade and lose money.
What Is Time Frame in Swing Trading?
Swing trading depends a lot on market trends. The trends can be short-term, intermediary, or primary, but no market exists only once.
A trend may be profitable on a short-term basis. Yet, traders can experience losses during intermediate or primary time frames.
So, it becomes crucial to focus on a single time frame in swing trading. This way, traders can develop strategies to profit in that time frame. That is when knowing the best time frame for swing trading is vital.
Swing trading time frames can bring you money against your investment. Or you might lose money due to misunderstanding the time frame for swing trading forex. Let’s continue reading to check the time frames you should track.
What Time Frames Should a Swing Trader be Tracking?
The time frame for swing trading has a general rule for swing traders. There are different kinds of time frames. You will have to think about different factors before focusing on one particular time frame.
The ideal rule is to focus on the more extended time frames. They give you reliable and credible signals to invest in swing trading. The shorter time frames can become noisy and give false signals.
But for a swing trader, it might not be so simple! It is recommended that swing traders use shorter time frames to gain higher profits. You can focus on 60-minute, daily, or weekly charts for swing trading.
Different Time Frames for Swing Trading
Now the real question comes- what charts to use for swing trading? Different swing trading charts swing traders can use. And depending on the preferred swing trading chart, you can find the best time frame for you.
Here are some of the most common chart patterns for swing trading:
The first one on the list is the longer time frame chart for swing trading. You can identify the natural weekly trends of the market from this chart.
Weekly charts give you a larger picture of the market. You will also know the overall stock directions from weekly charts.
Moreover, weekly charts allow you to identify strong and weak trends. If you find a strong trend, you might want to ride to the top. And if it’s a weak trend, you might want to fade away from the investment.
Daily charts allow you to analyze trends in depth. You will be able to find whether your trading decision is on the right path or not. As a result, you will also be able to identify the exact way for trade entries.
Daily charts basically show micro trends in the trading market. Micro-trends help swing traders to make quick decisions and gain quick profit. Consequently, you can continuously move to newer investments that give you quick profits. This is why daily charts are possibly the best chart time frame for swing trading.
With a 4-hour chart, we have come down to even a shorter time frame. You can identify price movement at the smallest levels with this chart. It is also one of the most preferred time frames for swing trading.
The 4-hour swing trading strategy involves identifying trend divergences. If you invest in a volatile market, this is the best time frame to consider. It might be best to invest and complete trading quickly rather than holding trades for a long time in such a situation.
1-hour charts are one of the most used time frames for swing traders. It is another option for traders who trade in volatile markets. You can quickly use the price changes to enter and exit the market.
Traders use this time frame when they see a sudden price hike. In these kinds of situations, price hikes go down very quickly. Swing traders want to use the opportunity faster by looking into hourly charts.
As a result, traders make a quick profit from their investments. In trading terms, it is also known as “wash-ups.”
15-minute time frames
This is the lowest time frame a trader can use. They are also known as lower time frames. These time frames are usually below hourly charts for traders to look into.
The most common lower time frame chart is the 15-minute chart. This kind of chart is less significant than other charts. And also, traders cannot rely much on 15-minute charts for swing trading.
The Best Time Frame for Swing Trading
So, what time frames to use for swing trading as a swing trader? Our answer is quite simple. It would be best to use the daily time frame for the best results.
The daily time frame might not be the most popular out there. But it is undoubtedly the smartest option in your hand.
How is it so beneficial? Here are 3 reasons why the daily time frame is the best chart for swing trading.
It is reliable and significant
The daily time frame is the most used swing trading time frame. Both newcomers and bigshot traders use this time frame for swing trading. This is because the daily time frame shows the most reliable and credible good swing trade stocks.
The primary attention of the daily time frame is on daily market prices. You can enter and exit throughout the day whenever you see an opportunity. Other options like minute bars or weekly charts do not have the same potential and significance.
Strategies are easier to execute
As a swing trader, you don’t want to be stuck in front of your computer all day. This means that you cannot use short time frames. And also, you need time frames that are just long enough.
The daily time frame allows you to do exactly that. You can easily implement whatever strategies you have prepared. The daily time frame also gives you a flexible schedule. This means that you can use any time between the opening and closing of the day for swing trading.
Avoid curve fitting
Curve fitting is one of the significant reasons behind swing trading failures. It happens when you use traditional data instead of current market behavior. Thus, you need strong strategies that follow the present trends.
The best way to do that is by using the daily time frame. You can focus on true market behavior with lower time frames. The daily time frame is reliable and possesses better chances.
The best time frame for swing trading is the daily time frame. It allows you to take advantage of the entry and exit time of the whole day to execute your trading strategies. And it is highly reliable and profitable for swing traders.
But you can still opt for multiple time frames for swing trading. You can start with weekly charts and move forward to the daily charts. There is also the 4-hour time frame that is the best short-term chart for traders.
You might also use the hourly charts to use the sudden changes in market trends. Yet, the best strategy is to find your own setting. We are here just to guide you with handy resources.
Which Timeframe is Best for Swing Trading?
The best time frame for swing trading is the daily timeframe. It is the most reliable and optimum time frame to use by swing traders. Also, swing traders can use the 4-hour timeframe for having the advantage of free time in between trades.
Is a 1 Hour Time Frame Good for Swing Trading?
The 1-hour time frame is good for swing trading. You will experience a fast environment to trade stocks or mutual funds. But it is also slow enough to avoid reckless decisions.
Is Swing Trading Safer Than Day Trading?
The fundamental difference between swing trading and day trading is their time frames. Yet, both have their fair share of risks—the more the risk, the better chance for traders to profit. Day trading has lower chances of losses than swing trading in the most basic terms.
Which Time Frame is Best for Support and Resistance?
Moving averages of 10, 20, 50, 100, and 200 periods are the most used time frames. The longer times frames are more secured for support and resistance.
How Do You Trade a 30 Minute Chart?
Trading a 30-minute chart is as same as trading a 15-minute chart. It involves 3 key steps. At first, you identify the smallest and sudden changes in trends. From there, you wait for a pullback. And finally, check the swing trading indicator. The indicator gives you the prediction of the trend to be upward or downward for swing trading.