Intraday Trading Time Analysis

Intraday trading is a unique trading technique that involves the buying and selling of stock on the same day to profit from the volatility of that day. That said, intraday trading can not be performed on a whim—proper analysis is essential before you place your intraday trades. In this article, we will comprehend the concept of intraday time analysis. 

What is Intraday Time Analysis?

The secret to successful intraday trading is making the right move at the right time. Before looking at specific intraday trading strategies, it is important that you have a firm grasp of intraday time analysis. 

If you want to get into any sort of short-term trading, your main source of reference for time analysis is the price charts. Price movement from the start of the day to the end is displayed on a daily price chart. An experienced intraday trader examines such charts to predict future share market movements. 

The analysis of market behaviour during particular trading day time periods is known as intraday trading time analysis, which is conducted by referring to the price charts. By applying time analysis, traders are able to find and evaluate trends and patterns to make informed trading decisions.

Types of Intraday Trading Charts

Here are some of the most commonly referred charts for intraday trading:

• Tick charts: Based on the volume of trades, tick charts show a security's price changes. Instead of representing a defined time period, each candle or bar on a tick chart indicates a fixed number of deals (for instance, 100 or 1,000 trades). Tick charts can be used to analyse recent price changes and spot market patterns.
• Minute candlestick charts: Minute charts show price changes over a predetermined amount of time, like 1-minute, 5-minute, or 15-minute. On a minute chart, each candle or bar shows a price movement that took place during that time frame. Minute charts, like the 5-minute candlestick chart, are popular among intraday traders for short- to medium-term trend and pattern detection. However, at times, long-term traders also use these charts to find precise entry points.
• Hourly candlestick charts: Like minute charts, hourly charts also show price changes over a predetermined amount of time—but in the case of hourly charts, each candlestick spans for a specific time period in hours; for example, one hour, two hours, or three hours. On an hourly chart, each candle or bar reflects a price movement that took place during that time frame. For spotting patterns and trends over longer time periods, hourly charts are helpful.
• Daily charts: Daily charts show price changes over a predetermined time frame of one day. On a daily chart, each candle or bar reflects a day's worth of price changes. Daily charts can be used to spot patterns and long-term trends.

Significance of Intraday Trading Charts

Charts are a good tool to analyse price data—trends and patterns—in a short as well as long time frame. So, both long-term and short-term investments can be made by looking at price charts. However, they are mainly employed by short-term or intraday traders who are more focused on the price action than the company fundamentals. Charts are critical in helping day traders assess market trends and seek insights into the market behaviour of a specific stock.

What is the Best Time Frame for Intraday Traders?

Stock market professionals claim that the best time frame for intraday trading is between 10.15 and 2.31. This is due to the fact that the morning stock volatility decreases by 10.00-10.15 am. It is therefore the perfect time to make an intraday trade. This argument suggests that traders exit their intraday positions by 2.30 p.m., which is much before the closing bell rings. They can avoid getting excessively caught in situations of high volatility in this way.

Conclusion 
Traders perform intraday time analysis to examine how the market behaves during particular times of the trading day. With that they can improve their trading decision by spotting trends and patterns in the market. Charts serve as the main point of reference for traders while analyzing intraday trading time; intraday traders can use tick-charts, minute charts, hourly charts, and daily charts provided by a stock market app.