Timeframes

Two traders look at EUR/USD at the same moment. One says it is in a clear uptrend; the other says it is falling. Both are right. They are looking at different timeframes.

One day, three views

M15H1H4

The same 24 hours as 24 one-hour candles. Each one contains four M15 candles.

Tap a timeframe. It is the same 24 hours of prices every time.

A timeframe is how much time each candle covers. Common ones are M1, M5, M15, H1, H4, D1 and W1 (minutes, hours, day, week). The chart above is the same 24 hours every time; only the grouping changes.

Timeframes nest exactly. Four M15 candles make one H1 candle: the H1 open is the first M15 open, the close is the last M15 close, and the high and low are the extremes of the four.

What you gain and lose

Going up a timeframe removes noise. Trends and levels become obvious, signals are more reliable, and you need to check the chart less often. But each candle takes longer to form, so entries are less precise and stop losses are wider.

Going down a timeframe gives detail and tighter entries, at the cost of more false signals and more screen time. Below M15 the noise usually outweighs the information for most people.

Notice how, in the chart above, the H4 view shows the shape of the day in six candles while the M15 view shows every wobble. Neither is “right”; they answer different questions.

Choosing yours

Pick a working timeframe you can follow. If you can check charts twice a day, H4 and D1 fit. If you have an hour each evening, H1. Day-trading on M5 requires hours of attention and is the hardest place to start.

Quick check

1. Question 1 of 3

   How many M15 candles are in one H4 candle?

   A4B16C24

Go deeper: Timeframes in forex: which should you trade?