Best Time Frame for Intraday Trading

In an intraday trading strategy, the trader purchases and sells stocks on the same trading day to profit from swift price changes. For that, they use various strategies, follow different guidelines and refer to specific intraday time frames. In this article, we try to decode the best time frame for intraday trading in India. It’s worth noting that we are not referring to the intraday time frame on the chart, but trying to provide some tips on when intraday traders should place their trades. Let’s see which time frame candle is best for intraday trading.

What Time Should I Start Trading?

In India, stock exchanges commence regular trading operations at 9:15 a.m. However, placing your trade order immediately as the market opens may not be advisable, particularly for beginners. Certain time frames during the trading day are more favourable for intraday trading than others. Broadly, a regular trading session can be divided into three sessions using a stock trading app: 
 

As an intraday trader, you should find the best time for intraday trading to maximise efficiency and profitability. The best time to do intraday trading can vary based on market conditions, volatility, and personal trading strategy. Even experienced traders prefer trading at a specific time rather than at any arbitrary point during the trading session. 

While there is no one-size-fits-all answer to find the best time frame for Intraday trading , However many  intraday traders prefer trading during the mid-morning to mid-afternoon sessions between 10:15 AM and 2:30 PM. That is because it is generally only at 10 AM that the initial volatility settles, the stock market cools down, and the price action is relatively stable. 

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Choosing the Right Time Frame for Intraday Trading

To determine the right time frame for intraday trading, it's essential to analyse various time charts. Depending on your preference, you can make informed decisions when buying stocks online for intraday trading. 

• 1-minute chart: A 1-minute chart proves beneficial for extremely short-term scalping strategies and identifying opening range breakouts. Successful trading in this time frame requires swift execution and continuous monitoring.
• 5-minute chart: A 5-minute chart serves well for short-term momentum trades, spotting support/resistance levels, and establishing intraday trends. It provides more contextual information compared to the 1-minute charts.
• 15-minute chart: The 15-minute chart balances capturing short-term moves and filtering out noise. It offers clear signals for key support/resistance and trends.
• 30-minute chart: Using the 30-minute chart suits swing trading, which features less noise than lower time frames. Crucial intraday support and resistance levels become prominent, providing a broader market context.
• 60-minute chart: The 60-minute chart identifies longer-term intraday trends and is useful for discerning larger support/resistance zones for the day.

Check out the Intraday stocks for today here. 

Intraday Trading Timings for Commodities

Commodity trading on the Multi Commodity Exchange of India (MCX) takes place from Monday to Friday, starting at 9:00 a.m. and ending at 11:30 p.m. During daylight savings (November to March), the trading hours extend to 11:55 p.m. The market operates in two sessions: the morning session (9:00 a.m. to 5:00 p.m.) and the evening session (5:00 p.m. to 11:30/11:55 p.m.). The agricultural commodities trading within futures closes at 5:00 p.m. while the energy goods, bullions and metals trade goes up till the evening. Notably, according to the information from the MCX website, trading remains closed during weekends and holidays which are mentioned or declared.

What is Intraday Time Analysis?

The popularity of online trading has grown among investors seeking the convenience of buying and selling stocks from their residences. Finding the best time frame for Intraday trading involves analysing patterns in the stock market. The operation of stock markets during a single trading day varies based on factors such as market hours, prevailing economic conditions, and trader sentiment. Intraday trading distinctions within a day have a substantial impact on price movements, liquidity, and the overall trading environment.

Successful day trading depends on a thorough understanding of the dynamic shifts in market conditions throughout the day. The ability to understand and navigate intraday volatility is crucial for achieving success in day trading. The initial moments of a trading session typically exhibit heightened volatility, marked by swift and significant price movements. Traders respond to overnight news and the release of economic data, leading to rapid changes in prices. Intraday traders may utilise strategies to take advantage of these early price swings.

Should You Trade When the Market Opens?

The opening of the market is often associated with increased volatility. Prices can experience significant fluctuations due to overnight news, earnings reports, or other factors. For beginners, it is better to wait until the mid-morning session, and if that’s too much, at least consider waiting out until 9:30 AM. But if you are comfortable with high volatility and have a strategy that works well in such conditions, trading at the market's opening time might be suitable. 

Several factors can account for the intense volatility during the first hour of the stock market opening. Traders need to be aware of the various factors that affect market volatility. Some traders take advantage of the volatility during the market opening hours, while others may prefer to wait for more stable conditions later in the trading day. Additionally, risk management is crucial during periods of high volatility.

Should I Trade in the First 15 Minutes?

The decision to trade in the first 15 minutes depends on individual preferences, risk appetite, and the ability to steer the market's early fluctuations. The initial moments of the trading day may witness increased volatility as the market responds to overnight news, economic data, or corporate announcements.  

The initial few minutes typically experience lower liquidity than later in the trading session. This reduced liquidity can lead to broader bid-ask spreads and difficulties executing trades at desired prices, potentially influencing trading costs and overall profitability. Experts hold contrasting opinions on the right time frame for intraday trading, but there is a general consent to avoid the first and last hours due to increased volatility. This volatility is due to the market's reaction to overnight news, economic data, or corporate announcements. While volatility can offer trading prospects, it simultaneously raises the risk of sudden and unpredictable price swings. Similar volatility is also anticipated in the final hour of trading as many traders square off their positions. 

Why is it Important to Trade During the Right Time Frame?

After understanding which time frame is best for intraday trading, let’s look at why it's important to choose the right time frame that aligns your trading strategy with market conditions, increasing the likelihood of success. You effectively utilise your capital and enhance your profitability if you know what to expect regarding volatility, liquidity, and trading volumes. By adapting your trading approach to the right time frame, you increase the likelihood of discovering setups that are compatible with your strategy. Trading during a suitable time frame also helps with risk management, helping to mitigate the potential for excessive losses. 

Best Candlestick Charts for Intraday Trading

Visual representations of trade data over predetermined periods are called candlestick charts. Candlesticks, which are red and green bars with two lines at either end, are used in these charts. Traders may better perceive market emotions and movements by using candlestick patterns.

Typical intraday candlestick patterns include the "5-minute Candlestick chart" and the "15-minute Candlestick chart." The four points on a candlestick are referred to as the "open high low close" (OHLC). The "5 minutes Candlestick chart" allows traders to view the OHLC for the preceding five minutes. This is a popular intraday trading method since it shows short-term market volatility.

Conclusion
A Demat account stores stocks and is essential for placing buy/sell orders on the stock exchange. Prediction of the market direction and momentum is essentially supposed to be done in order to have successful intraday trading with the help of using stop-loss for conserving capital. Further, select the correct stock market app and time frame of trading. For India, mid-morning to mid-afternoon sessions are best to get optimum volatility while the first hour is pretty dicey for beginners. Market conditions and timing are very instrumental in improving one's trading performance, even in the management of risks.