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The secret to choosing the perfect How to Lose US$ 1
chart time frame Billion & Survive
Smart traders learn from
By Apurva Sheth, Editor, Profit Hunter · 10 Dec 2014 · ARCHIVES
others mistakes to survive in
the stock markets. Here's
Google Bookmark Facebook 2 Twitter Print learning from George Soros'
biggest blunder of all
time. Read More...
I've already explained to you the basic elements of chart construction. I
hope now that when you see a chart you immediately see the different by Apurva Sheth | 19 Jan 2018

parts of it and are able to read its basic information.

Your Last Chance to
Now, charts can be constructed based on different time-frames.
Trade ONLY the Best
Apurva Sheth Stocks
I myself use a few different time-frames when I create charts, and today I
Techno-Funda opportunities
will show you some of these.
are knocking on your door.
Are you ready to receive
Let's start with lowest time frame charts.
them? Read More...

1. Intraday Chart by Apurva Sheth | 11 Nov 2017

This chart is used to plot price movements during a trading session. It would consist
of all the data points between a market opening and closing.
Trade ONLY the Best
Intraday charts give you a detailed picture for the day's movement. These charts can Stocks
be used to view a single day's movement from session opening to closing or many Apurva shares his magical
days intraday movement from opening to closing. strategy to pick best trades of
the best stocks across Indian
For example, I may want to see the price movement on the index for an important day stock market. Read More...
like the RBI Policy or may want to see the last fortnight's intraday charts leading up to
by Apurva Sheth | 11 Nov 2017
the event. The most commonly used time frame on an intraday chart is 1 hour, also
known as an hourly chart.

Depending on your trading style and preference you can have charts as low as tick
charts which is a chart that plots price every second.

(Later in this letter I will share my secret and logic of choosing the perfect time frame
for trading...)

For the time being just have a look at the chart below. It's a 60 min chart of Nifty since
17th October 2014. The data between the dotted vertical lines represents one day's
trading activity.

60 min Nifty chart since 17 Oct 2014

Source: Spider Software India

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2. Daily Chart
A day represents a complete cycle of events in our lives right from sunrise to sunset.
We wake up every morning, perform our duties during the day and retire from all the
chores in the night and the cycle moves on. We live our lives in parts and a day is the
best representation of such parts.

An advantage of looking at daily charts is that it makes your trading less emotional as
it adds only one new piece of information every day. So you can sit back and take a
prudent decision without worrying for tracking price change every minute. I have
personally observed and learned that focusing on daily charts helps you avoid two
biggest mistakes a common trader does i.e. overtrading and overanalyzing.

Most market observers including fundamental analysts, financial media etc. gauge
prices on a day-to-day basis. Even the NAV of a mutual fund is calculated on a day-
to-day basis. Psychologically, daily price movements is what affects the most to
anyone in the financial markets.

The charts that you saw in my previous articles were all daily charts. I also prefer
daily price charts over all other time frames.

Nifty daily candlestick chart since March 2014

Source: Spider Software India

3. Weekly Chart
Weekly charts plot a whole week's price data. So a weekly candle opening price
would be Monday's open, and close would be Friday's closing level. The highest and
lowest that the stock or index may have travelled during the whole week will become
the high and low for the weekly candle.

The chart that I have attached below is a weekly chart and it shows data for the same
period that the daily chart posted above shows. You must have noticed that the
number of candles have reduced in the weekly chart and it is also less sensitive to
price movements compared to the daily chart. That's because it combines 5 days
data points into 1 week. This helps focus more on the trend rather than its sensitivity.

Nifty weekly candlestick chart since March 2014

Source: Spider Software India

4. Monthly Chart
Monthly charts are prepared using the same principles that are used for preparation
of weekly charts. The opening price of the first trading day of a month's open is
considered as the opening level for month.

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And the last trading day's close is considered as closing level for the month. These
charts are mostly used by investors with a longer horizon. There are charts even
higher than monthly time frame ones like quarterly, half-yearly and yearly but unless
your investment horizon matches Warren Buffett's you don't need to look at these.

Nifty monthly candlestick chart since March 2009

Source: Spider Software India

Ideal Chart Timeframes based on market participation

Market Participant Time in Expected Returns in % per Chart used for
Position trade Trend Entry & Exit
Determination Points
Long term investor Months to years 30% and higher Monthly Weekly
Intermediate term Weeks to 12%-30% Weekly Daily
trader months
Swing trader 3-20 days 6% - 20% Daily Hourly
Day trader Hours 0.5% - 2% Hourly 10 minute
Micro trader Seconds to A few pips 5 minute 1 minute
minutes

As promised, let me tell you how I go about choosing a timeframe for my analysis. The
table above will help you determine an ideal time frame to choose for your analysis
depending on the category of participant you fall into.

I am sure several of you will fall in the category of either a swing trader or intermediate
trader. I have spent most of my career in recommending ideas to these two group of
market participants, and if you are into this kind of trading, then this is the perfect platform
for you!

Okay, so let's assume you are a swing trader interested in trading ideas that generate
returns of anywhere between 6-20% in a period of 3-20 days.

The chart that you should pick up for your analysis or trend determination is a daily chart.
All your trading decisions should be based on this chart alone. The chart you pick up for
trend determination will become your 'Chart of Choice' (CoC). Now once you are
convinced that the stock you have chosen is worth your hard-earned money...

'STOP'

Don't be in a hurry to place an order with your broker. Just hold on to your excitement and
put your phone back where you picked it up from.

Now once you are settled just jot down your points/arguments for entering the stock.

Once you are done with it, just check one degree higher time frame chart above your
'CoC' to CONFIRM whether this chart also reinforces the same view you had about the
stock when you analyzed it on your 'CoC'.

In this case we will check the weekly chart of the stock and confirm our views on a higher
time frame.

If it doesn't confirm, then it's not the best of things to go ahead with this stock.

On the other hand, If you are convinced that the stock is worth your money, just hold on

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4/27/2020 The secret to choosing the perfect chart time frame - Profit Hunter Newsletter
to your breath and check a lower degree time frame chart for best entry opportunity.

A lower degree chart in this case would be an intraday chart.

My favorite timeframe on an intraday chart is 75 minutes.

The 75 minute timeframe chart divides our market hours which start from 9.15 am to 3.30
pm (375 minutes) into exactly 5 equal-sized candles. This helps me get a better picture
for the day and score over the hourly candles, which breaks unequally at the end.

In case I want to move further down on the timeframe, I choose a 25 min candle which
divides 75 min into 3 equal parts or a 15 min candle which divides 75 min into 5 equal
parts.

Check for a best entry opportunity on intraday charts and then finally place an order with
your broker, who will be eager to buy at the market rate but you would stay firm with your
price levels and not get influenced with his sweet talk.

Now I am sure you must be thinking that what do I look for on a weekly, daily or intraday
chart and how do I decide whether to buy or sell a stock. Don't worry! As we move ahead
in this journey I will show you techniques that help you figure out exactly how you are to
decide that. But until then I have given you a process to follow while doing your analysis.

And I promise that we will revisit this trading strategy again once we are through with a
few more technical analysis concepts... so stay tuned.

Which time frame charts do you prefer? How and why did you choose this time frame?
Share your views in the Club or share your comments here.

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frame". Click here!

31 Responses to "The secret to choosing the perfect chart time frame"

Sarath Kumar Sir I need Best Time frame exit in nifty 50 Like
10 Apr, 2020

Manish Patel Well Explained... The chart would be one level higher and than Like
03 Apr, 2020 a small time frame.. for an opportunity for entry.

Satish Explained very well sir. Like

31 Mar, 2020

Sanjeev Very nicely explained Like

chauhan
13 Mar, 2020

Dr Vidhyadhar I want to see tha chart and do intraday trade Like (1)
Fagaria
03 Jan, 2020

DR SR RAMESH good article as far as it has gone. may be it could have been Like (2)
19 Nov, 2019 completed with the utility of each time frame and how multi time
frames could be used. may it would have benefitted beginners
like me who know nothing about stock trading. thanks for the
effort DR. SR RAMESH

Tushar Bhalekar It is very usefull for understanding to in day. Like

02 Nov, 2019

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4/27/2020 The secret to choosing the perfect chart time frame - Profit Hunter Newsletter
NiftyTrader09Vx Best Article. Lot of fools here. Everyone wants FREE money. Like (1)
29 Sep, 2019 Hannah. Read the article properly. No free lunch guys. Do your
proper home work.

Emmanuel Fiifi This was a good read Like (1)

Rockson
07 Jul, 2019

Sandeep Mishra This is life changing technique for INTRADAY traders for my all Like (7)
15 Jan, 2019 brothers please note carefully in you mind :- use this indicator --
-- VWAP = volume weighted average price How to use.. see
many VWAP videos on youtube. Enjoy Trading Thankyou.

Emmanuel The secret to choosing the perfect chart time is highly important Like (10)
Enyiegbulam to me. Please i need it and more. Thanks
31 Jan, 2018

Prem Sir how and where we can get these charts for accessing Like (8)
06 Dec, 2017

Pradip How to trade nifty intraday Like (16)

Chatterjee
08 Aug, 2017

sukumar sir, i need markets entry exit times,and time frame of charts. Like (13)
29 Jul, 2017 thanking you,

Vivek Joshi Sir But if I am a day trader and want to enter a trade after 5 min Like (8)
25 May, 2017 of market opening. Which time frame I will choose as the day
has just starter and I would not have 75min or 25 min time
frame

manus Apurva Seth, do you read the comments here? Even after Like (4)
21 Dec, 2016 reading if you are not responding means you are thinking that
all are waste here. For day trading you are saying to see trend
use hourly chart and for entry exit 10 min chart. 10 min chart
decides trend or hourly chart. 6 candles of 10 min chart are
bullish. At the open 7th bullish candle on 10 min chart, first
bullish candle will erupt on hourly chart. If 7,8,9,10,11,12 are
bullish on 10 min chart then corresponding hourly chart candle
will close bullish. Otherwise doji. 1min candle decides whole
trend. 5 candles on 1 min chart are bullish? 1 candle of 5 min
chart is bullish. 2 continues bullish candles on 5 min chart? 1
bullish candle on 10 min chart. 3 bullish candles on 10 min
chart? 1 buliish candle on 30min chart. 60 bullish candles on 10
min chart = 10 bullish candles on hourly chart. Say bullish
candles started when RSI was 20, then where the RSI will go
on 10 min chart after 60 continues bullish candles? About
trading anyone is getting up writing anything which is coming to
his mind. Fortunately it is free here. I do not know if people are
taking huge money as fees to teach which do not know like this.
Niether hourly candle can tell the trend not 10 min. Only God
can tell what will happen next moment.

manus 1- Please tell which candles to follow? Hekin Ashi or Japanese. Like (12)
07 Dec, 2016 2- Time frame for trend and entry-exit is ok. Which indicator to
follow for entry-exit please?

ganesh i want to best time frame for intraday, Like (10)

19 Nov, 2016

gupta Dear sir, Thank you very much for sharing such a valuable Like (5)
02 Oct, 2016 information and i use 30 minutes time frame regularly

Manish Very nice explqination Like (3)

27 Aug, 2016

Lalitlk Glad to know your preference for time frame of 75 minutes. Had Like (1)
21 Apr, 2016 been trying to share my chart based on TF 75 minutes regularly
in FB group " Daily_Nifty".

Nilesh Dear sir, Thank you very much for sharing such a valuable Like (2)
01 Apr, 2016 information and also for increasing our confidence and

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4/27/2020 The secret to choosing the perfect chart time frame - Profit Hunter Newsletter
knowledge please share with us which is the best parameters
we should apply in hourly as well as daily charts

ibshan sir i m day trading no over nite postion and no tens market close Like (4)
chawdhry i m free
25 Feb, 2016

chandan nahata Sir, for a investor it is like a dream.when he doing the Like
01 Aug, 2015 transaction (buy/sell) confidantely,based on
technically.fundamentals we can draw ourselves.i shall be
happiest person,since i was looking for this since a long
time.thanks.

A K Goel Dear Seth, Lot of thanks sharing valuable knowledge, please Like
11 Jul, 2015 pass on maximum information on line those who can not afford .
Best of Luck Goel AK

LAKSHMIPATHY which time frame is suitable for equity intraday trading Like (9)
19 Dec, 2014

Anil Singh Hi! Mr Kochar, BSE & NSE both give these charts. You can Like (1)
16 Dec, 2014 access these charts on their website. And, I think, these are log-
based charts with multiple indicators.

Ravi pl guide us as where to get such software on which we can plot Like (6)
14 Dec, 2014 all charts alternately and use to trade with your suggested time
frame in the market hours thanks Eqty mtr and Apurva seth

ravi I use daily charts as I can't trade intraday bcz one has to Like
11 Dec, 2014 constatly monitor and find enrty and exit points.Any way your
guidance is very helpful to improve my skill. Thnks a lot dear
Apurva.I m looking forward to your articles.

Raviraj Hi Apurva, Thanks for sharing the ideal chart timeframes matrix. Like (2)
11 Dec, 2014 I use multi time-frame charts for my analysis and my favorite
timeframe is Daily and I use 4H or Hourly chart to time the entry
or to find the best pattern and entry and once in a trade I use
the Daily chart to continue with the trend.

D D Kochar Sir, I have precisely 3 questions to ask:- 1. From where does Like
11 Dec, 2014 procure the mentioned charts because i am sure the no AAM
investor can prepare such charts. 2. Can an AAM investor
spend time required to study such charts in his/her packed daily
routine? 3. If an AAM investor has to slog the time on such
charts, why should't he/she become an analyst and become
competetor to companies like Equity Master/Money works for
me/Alpha Invesco & many such more. Any investor wants a cut
& dried recommendation to invest with minimal effort

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