When I first got started with trading financial instruments. I admired trend traders a lot. I wanted to trade the trending markets.
But I always got confused what time-frame to trade. I switched from weekly to daily time-frame to 5-minute time-frame. I move around the hourly to minutes time-frame.
The inability to decide which timeframe to trade made me so confused. I kept on asking myself, what is the best time-frame to trade today. I would trade the daily time-frame, I make a loss.
I then jump to the 15-minute time-frame. it’s faster, I like it. But I still make a loss.
I had this feeling that trend trading doesn’t work at all. I knew it worked though. It was just the setbacks trying to mess with my mind to give-up on trend trading.
I started researching and checking out successful traders. I found out they all had different trading styles. Some were swing traders, day traders and scalpers.
Though they were different, they also had some things/concepts in common such as:
⦁ They understood that the trend is their friend.
⦁ They understood market structure/ behaviour.
For me to trade trends, I had to define my style and learn market behavior.
So what timeframe should you trend trade? To explain this, let me first differentiate the different types of traders. What differentiates a swing trader from a day trader or a scalper is time limit. It depends on your requirements.
Someone who is currently jobless and have plenty of free time can scalp. He can take up trading as a source of livelihood.
A scalper loves speed trading. He focuses on the minutes time-frame. He realizes his profit in a matter of minutes to few hours.
A part time student or someone who has some free time, day trading will work well. A day trader likes it not too fast not too slow. He focuses on hourly time-frames. He realizes his profits few hours to few days.
Someone who has a 9 to 5 job or a full-time student. Swing trading will work for him. A swing trader likes it slow. He focuses on daily and weekly time-frames. He realizes his profit few days to some weeks.
Is trend trading restricted for only one style of trading?
Let me answer the question by showing you some charts below. Each of them shows an up-trending market but of different time-frames (5, 15 minutes and 1, 4 hours).
The same patterns that occur on a 5 minute timeframe is still the same pattern that occurs on hourly and daily timeframe.
So what time-frame is best for trend trading? You can trade trending markets on any time-frame. It depends on what you want (swing trading, day trading, scalping) and your understanding market structure.