Chart Timeframes Explained

How many candles a week actually gives you

The numbers are worth knowing because they determine how quickly a method can be tested and how much screen time it demands. In a five-day forex week:

• M5: about 1,440 candles a week. A setup that occurs on 1% of bars fires roughly 14 times.
• H1: 120 candles. The same 1% setup fires about once.
• H4: 30 candles.
• D1: 5 candles a week, 260 a year.

A daily-chart strategy may produce twenty trades a year, which means several years of data before the results say anything at all. A five-minute strategy produces that in a fortnight, and pays for the privilege in costs: each of those trades carries a spread and slippage, and at that frequency the costs dominate. Neither is better. They are different bargains between sample size and expense.

Timeframe shopping, and how to catch yourself at it

There is a specific failure worth naming because almost everyone does it. You form a view, the chart you use does not support it, so you change the chart until one does. There is always a timeframe somewhere that agrees with you, because on 15 available intervals the market is simultaneously in an uptrend, a downtrend and a range.

The defence is to fix the timeframes in advance, in writing, as part of the setup definition rather than as a preference. Two charts, named, with the role of each specified: one for direction and one for entry. If a third chart is being opened, the question to ask is what evidence it could produce that would make you not take the trade. If there is no such answer, you are shopping.

A two-chart routine that fits around a job

If you cannot watch a screen all day, the timeframe choice is largely made for you, and that is not a disadvantage. A workable structure:

• Daily chart, once a day. Ten minutes at a fixed hour. Mark the levels, note the direction, decide which pairs are worth an alert.
• Four-hour chart for entries. Six candles a day, of which only two or three close in hours you are awake for, so the decision points fit around a working day and the stops are wide enough to survive ordinary noise.
• Alerts instead of monitoring. Set a price alert at the level and leave the chart alone until it fires.

This produces a handful of trades a month rather than a handful a day, which sounds like a limitation and is mostly a cost saving. Fewer trades means less spread, less slippage and fewer decisions taken while tired. Our note on trading sessions covers which hours those four-hour candles actually cover, which matters more than the label on them.