This is not the right question. The right question should be, “Which is the best time frame for ME?”
This is because there is no such thing as an absolute “best time frame” to trade. For example, some people may argue that lower time frames like the 5 or 15 minute charts are too noisy or random to trade consistently on, yet many successful professional traders are very actively scalping on those time frames.
Whether you are scalping, day trading or swing trading, there will be examples of successful traders using that time frame. Why is that?
Simply because it is the best time frame for them.
2 main factors come into play when deciding your best time frame to trade.
Or the lifestyle which you want to design for yourself with trading. Make no mistake, solely trading for a living is highly stressful. So think carefully when you design trading into your life. For those who have a lot of spare time on their hands, maybe you don’t need to hold a regular 9-5 job, or are taking a break to find your path in life, and you want trading to be your 9-5 activity to generate income. Then you are eligible to trade almost all timeframes.
For those who are employed, and would like to remain so, but pull some additional income from trading. Then longer time frames like swing trading and investing would work better for your lifestyle(like the kind Collin teaches, so if you’re interested find out more, please leave us your email later.). Shorter timeframes will not be suitable due to the higher intensity required from trading. After work you could be mentally drained and not at your best. And taking on additional hours of work for income means you are actually working overtime. However, if you trade on longer time frames, you can literally let your money work for you. It is less intense and there is much less screen time required to monitor your trades.
Your Trading Personality
The second factor is your trading personality. Some people are suited for lower timeframes best, others will find more success on longer time frames. When most new traders start out, they think that they’re more suited for shorter time frames because of the novelty of the activity, or because of the instant gratification from the quick feedback from their actions. It might also make them feel good and busy. They are “trading”. But the more important point is, are you profitable on that timeframe? Trading shorter timeframes requires a quicker mind, to process the information coming in, making a decision and acting upon it in a timely fashion, not to mention, usually you require better interfaces and IT infrastructure to trade very short timeframes. There is a higher level of urgency and stress associated with trading on lower timeframes. Most people will not be suited for this. It will be easier for most people to find profitability on longer time frames. Longer timeframes will require more patience to let price trigger entry signals and let the trades develop. Psychologically this is less stressful, and also usually more suitable for most people who are holding day jobs.
So think about where you are now, then think about what kind of life you want to design for yourself. Decide where trading fits in. Maybe you’re comfortable with your day job, and simply want additional income and grow your nest egg. Then the weekly or daily time frames will suit you well. Or if you strive to become an independant stay-home day trader who doesn’t have to answer to any boss. Maybe day trading on the 1 hour and 4 hour would suit you best. It all depends on how you want to design your life
Live a life well-designed, traders.