Warrior Trading Blog

Popular Chart Time Frames | Fast Explanation

Popular_Chart_Time

Hey everyone, Ross here from Warrior Trading. In this video, I’m going to talk about popular charting timeframes. As an active trader, we’re always looking at charts because charts provide the historical price action of a stock and they allow us to watch price action as it unfolds and creates chart pack.

What you’ll learn, if you don’t already know, is that traders rely on certain timeframes because they’re so popular. Now, their popularity creates a bit of a self fulfilling prophecy whereas when traders are seeing a price action pattern forming on a popular timeframe, they know that thousands, and thousands, and thousands of other traders are seeing the same pattern unfold. If it’s a bullish pattern, and all these people are watching it, it’s more likely that it will resolve in the direction you’d expect.

Most traders want to use the timeframes that are the most popular rather than using an obscure timeframe that nobody else is using. If you use an obscure timeframe, you may be only one seeing a pattern that’s unfolding and that may not result in strong resolution. Let me show you what I mean. Let’s jump in here to the charts. These are my light speed charts and what you’ll notice if I pull this back here, we can just look at Apple for instance today.

Apple squeezed up sort of mid day consolidation, and then right around here ended up pulling back on this candle, and consolidating just above the volume weighted average price. Now this is a bearish pattern. This is a a bear, it’s called a bear flag. It’s consolidation right here in the lows. The resolution for this pattern would be a break to the downside. Now because many traders are watching the five minute chart, it’s more likely that they saw this pattern, and we’re able to take this as an opportunity either to short the stock or to sell the open long positions that they may have been holding.

Now, if I right click here, I can go to chart parameters and I can see some of the other popular time frames. We have one minute and two minute charts, 10 minute, 15 minute, 30 minute, and 60 minutes. These are probably the most popular intraday timeframes with the majority of traders using the one minute, the five minute and sometimes using the 15 minute or the 60 minutes. I haven’t seen a lot of traders that use the 10 minute or the 30 minute, but there may be some that do.

All right, so as we switch through these time frames, we can look at the 15 minute here for a moment and in this particular instance, you see a fairly clear pattern of selloff here, a small bear flag and these bear flags, it looks like a check mark. They always, for proper resolution, would sell off. Sometimes they’ll go higher, but we’d like to see that sell off and so this was a clear five minute chart pattern … a 15 minute chart pattern. If you’re watching the 15 minute chart, you would have seen it.

Now, you would have also seen this on the five minute timeframe, but if you were using, let’s say the 60 minute timeframe, … Let’s go to chart parameters and switch to 60 minute. You may not have seen that pattern, right? The 60 minute is a little too far out. You wouldn’t have seen a pattern to take a trade. What I have found is that some of the best trades are ones that have multiple timeframes all lining up at the same time, both the five minute, the 15 minute and the 60 minute are all confirming the same pattern. That’s going to create a really strong breakout because traders that only use the 60 minute will see it.

Of course traders that use the 15 and the 60 will definitely see it, and traders that use the five minute 15 and the 60 will definitely see it. So that means a lot of traders and investors are going to be seeing this pattern. Whereas in contrast, if you saw a pattern that was only on one time frame, such as the one minute, which is probably used the least in general, although certainly used quite a bit, you may not see as much confirmation because simply you don’t have enough traders that are watching the setup.

All right, so I hope this has helped you understand some of the popular timeframes. In my trading, I use the one minute, the five minute, and then the daily chart just to look at historical price action. As usual, if you have any questions, don’t hesitate to reach out.

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