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
Analyzing the accurate time period is crucial in intraday trading and the traders can select the charts best suited to them based on their risk capacity and the time period being analyzed. All these time charts are commonly used and most prominent amongst the intraday traders.
What is the time analysis for intraday trading? ›
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.
Which is the best timeframe combination for intraday? ›
One to two hours of the stock market being open is the best time frame for intraday trading. However, most stock market trading channels open from 9:15 am in India. So, why not start at 9:15? If you are a seasoned trader, trading within the first 15 minutes might not be as much of a risk.
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.
What is the most accurate indicator for intraday trading? ›
Momentum Oscillators:
Momentum oscillators are considered one of the best indicators for intraday trading. At times traders can miss out on price movements during short-period cycles. This is when momentum oscillators can be helpful.
Which is the best strategy for intraday? ›
Momentum trading is one of the best intraday strategies if there is a clear trend in the market. This intraday trading strategy is effective when there is a strong price momentum in a particular direction.
What is multi timeframe analysis for intraday trading? ›
Multi-timeframe analysis is a technical analysis strategy that involves searching for market's potential entry points based on mutually confirming signals provided from three timeframes at once. In intraday trading, a combination of 30M, 15M, and 5-minute time frames is often used.
Which analysis is best for day trading? ›
Moving averages, relative strength index (RSI), and Bollinger Bands are among the most commonly used technical indicators in trading. These tools are used by traders to analyze price trends and potential market movements.
Which time zone is best for intraday trading? ›
While there is no one-size-fits-all answer, many intraday traders prefer trading during the mid-morning to mid-afternoon sessions—between 10:15 AM to 2:30 PM. That is because it is generally only 10 AM when the initial volatility settles, the stock market cools down, and the price action is relatively stable.
Which intraday pattern is best? ›
It is important to know which type of chart pattern does what in the market.
- 2.1 Head and Shoulders. ...
- 2.2 Double Top. ...
- 2.3 Double Bottom. ...
- 2.4 Ascending Triangle.
- 2.5 Descending Triangle. ...
- 2.6 Wedges. ...
- 2.7 Symmetrical Triangle. ...
- 2.8 Cup and Handle.
The Best Time Frame for Intraday Traders
Hence, the best time to enter the market would be after 10 am when the initial volatility has subsided and the ideal time to square off trade would be by 2.30 pm.
What is the 10 am rule in stock trading? ›
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. For example, if a stock closed at $40 the previous day, opened at $42 the next, and reached $43 by 10 a.m., this would indicate that the stock is likely to remain above $42 by market close.
What is the 357 rule in trading? ›
The 3–5–7 rule in trading is a risk management principle that suggests allocating a certain percentage of your trading capital to different trades based on their risk levels.
What is the 5 minute rule in trading? ›
The 5-Minute strategy is created to aid sellers and buyers engage in back tracking and spend some time in the location with the appearance of prices proceed in a latest route. The system depends upon exponential moving averages and the MACD forex trading indicators.
What is the 2 rule in trading? ›
One popular method is the 2% Rule, which means you never put more than 2% of your account equity at risk (Table 1). For example, if you are trading a $50,000 account, and you choose a risk management stop loss of 2%, you could risk up to $1,000 on any given trade.
Which technique is best for intraday trading? ›
There are several strategies for intraday trading; a few of the best ones are - Momentum trading strategy, Breakout trading strategy, Moving average crossover strategy, Gap and Go trading strategy, and the "risky" Reversal trading strategy. What is a reversal trading strategy?
Which study is best for intraday trading? ›
- Program in Wealth Management.
- Advance Technical Analysis.
- Advance Equity Research And Valuation Course.
- Advanced Technicals & Options Trading Strategies.
- Advanced Equity Research & Technical Analysis.
- Advance Future and Options.
- Index Trading Strategies Course.
- Research, Trading & Advisory (E-CRTA)
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.
