Choosing a timeframe | Understanding price charts

A timeframe determines the period represented by each candle or bar. Different timeframes reveal different levels of detail.

The idea

On a one-hour chart, each candle summarises one hour. On a daily chart, each candle summarises one trading day. A market can appear to rise on a shorter chart while falling over a longer period. Timeframe is not the same as how long you hold a position. Use views that help you understand the question you are asking.

Apply the idea

Open a daily chart and note the general direction and recent high and low. Then look at a one-hour chart of the same market. You may see a short decline within a broader rise. Both observations can be true because they cover different periods.

Key takeaway

State the timeframe whenever you describe a trend or level. Compare views for context without assuming that one timeframe predicts another.