One of the most crucial elements of swing trading is knowing which timeframe to trade. There is a wide variety of timeframes that a swing trader has available to them. However, knowing which timeframes are best suited to swing trading can make the difference between you being a profitable trader or one that quits because they blew up their trading account. It should be of great importance then for any trader to know which timeframes give them that much needed trading edge. There are a lot of timeframes you could swing trade with, but can you get an edge by using one or two over others? The 4 hour to daily timeframes are considered the best to be used for swing trading. In actual fact, these two timeframes are the best timeframes for any style of trading and for any market no matter where you live int he world. This simple fact is something that is neglected by many traders and as a result they miss out on the chance to gain a simple trading advantage by using the right timeframes.
Why are these two timeframes the best suited for swing trading? The 4 hour to daily charts are the best suited to swing trade because they are high enough to remove market noise but also short enough to allow you to spot and take advantage of trends before they change. Lower timeframes, less than the hourly, are usually so low or fast that they are cluttered with market noise. Trading these timeframes successfully is difficult for anyone, especially someone who is still new to trading. The trend can be so hard to spot because of all the market noise. You may also discover that trends in these lower timeframes is so fast and short lived that they are impossible to trade. By the time you have identified the trend, it may have already changed and you end up trading against the new trend instead of with it. How can a trader avoid this problem of market noise? The way you can avoid this is by using timeframes that are not lower than the 4 hour timeframe, especially if you are a beginner. More seasoned swing traders are known to glance at the hourly charts to see if they can improve their entry points, but by no means do they use it to constantly monitor the markets and trends.
However, swing traders usually don t go any higher than the daily chart for trading. Timeframes higher than the daily chart can be useful to observe markets with but they aren t recommend to be used for trading. If lower timeframes offer too much noise, how can timeframes higher than the daily not offer any advantage to a swing trader? The main disadvantage of using timeframes higher than the daily is that you would be waiting weeks to months before placing a trade. These timeframes move very slow and as a result provide much less opportunity to get in and out of the markets.
The four hour to daily charts are considered the best timeframes to be used for swing trading. Trading these timeframes greatly improves your trading edge as you are able to identify trends with much more accuracy.
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