How to Determine the Right Time Frame for Crypto Trading

The cryptocurrency market sees new traders entering in large numbers every day to reap their share of profits. The common question among new traders is “what is the right time frame for crypto trading.”

Different traders use different time frames for crypto trading. Usually, traders with a firm grip on the market rely on various technical analyses and indicators. But with so many charts, graphical data, and figures, it is easy to get lost in a forest of data.

There are different time frames to make your trade. Some are longer and require patience, while others are shorter and fast-paced. Let’s take a look at what each offers and what suits you best.

The Multi-Time Frame Trading

To understand the best entry and exit points in crypto trading, you need to know the basic time frames and the differences between each.

Long-term

The long-term time frame refers to traders using weekly charts to analyze market behavior, which helps them plan long-term entries. Traders make plans for weeks, months even a couple of years for their specific entry points. It allows traders to have more time to build a solid strategy and does not need them to interfere on an intraday basis. However, it requires patience and larger investments to make the most out of the long-term time frame.

Short-term (swing)

Traders use shorter time frames to hold trade from hours up to a week. This strategy is used to make a reasonable amount of trades, which ends the dependency on gaining profit from only a couple of trades when trading for long-term. However, you will have to pay higher transaction fees to pay the spread.

Intraday

Intraday involves traders specifying entry and exit points for only a couple of minutes. They use minute chats to analyze and are excited by the market close. This time frame involves lots of trading chances and lower risks of losing. At the same time, it offers limited profits and much higher transaction costs to pay for spreads.

What Is the Right Time Frame for Crypto Trading?

A common harmful practice traders partake in is overlooking a single time frame for your entry and exit points. Being in multiple time frames needs a bunch of data analysis and looking at different charts, which results in a lack of focus and a good strategy for trading.

However, using multi-frame trading also has its perks as it diversifies your chances of better trading. For most effective trading, using two time frames is a good practice. Going higher than that comes with more risks than benefits.

Most traders use day trading and enter the market around 1 p.m. EST. While others wait for the day to end when the desperation to finish off at a better position is at its peak.

Bottom Line

In the end, it all depends on you. The top traders rely on their instincts and personality rather than relying on analytics and charts. They use them to study the market trends, but their experience brings them the best returns. To figure out which time frame works best for you, start small and scale your frames gradually, and after some time, you will know where you can make the most out of crypto trading.