Timeframes

A timeframe is how much time fits into one candle. The same market looks different on different timeframes.

Author: I. D. Galtsov

Scheme on candles

Timeframes — what it is?

A timeframe is the period one candle holds. On H1 a candle closes every hour, on M15 every fifteen minutes. The data is the same, only the level of detail changes.

The lower timeframe shows noise, the higher one shows intent. The same move looks like a full-blown trend on M5 and turns out to be a single candle inside a correction on H4.

That's why you don't work with one timeframe but with a hierarchy: the higher one sets direction, the working one gives structure, the lower one gives the entry point.

Timeframes — how it is built?

In this app H4 is contextual, H1 and M15 are the working ones. A sensible rule: neighbouring timeframes should differ by roughly a factor of four, otherwise they show you the same thing.

Timeframes — common mistakes

Switching timeframe after entering to find a justification for the trade. That's not analysis, it's looking for comfort.

Making a decision on an unclosed candle: it can repaint completely.

Dropping to M1 in search of precision. There's no structure there, only noise.

Watching only the lower timeframe and being surprised when price "suddenly" reverses.

Related to

Glossary

timeframe
the period one candle holds: M5 is five minutes, H1 an hour, D1 a day.
candle
the element of the chart that shows four prices for a period: open, high, low, close.
trend
a steady directional move in price.
point
the minimum step of a quote, usually ten times smaller than a pip.

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