If you are trading, you will fit into one of the following categories- Day Trader, Swing Trader, or Trend Trader. The investor fits into the trend trader category. Trend trading is a trading strategy according to which one should buy an asset when its price trend goes up, and sell when its trend goes down, expecting price movements in the future to continue. For the simple-minded like me, all that means is buy on the dip (low).
I am sort of a HODLer (Hold On for Dear Life). But during pullbacks, the use of coin-cost averaging allowed me to increase my holding while waiting for the price to increase. As an investor, the strategy is to buy during pullbacks (dips). So, understanding time frames for trading is important. Here is how you should use them. I always use additional indicators to confirm a trend (Stoch or Heiken Ashi) to get a higher probability.
First, the monthly.
The monthly time frame – you can use as overall long term. I use the monthly with a 21-day moving average (MA) to indicate whether bitcoin is still bullish. As long as the moving averages are under the candles, overall I consider it still bullish on its last legs while the masses say we are in a bear market. We would be going down. Looks sideways to me! Okay.
The daily time frames – you can use for the big picture. Here you are able to see trend patterns. Moving averages above candles. At this level, we are bearish. but indicators pointing to bullish. Stochastic has upward momentum. The MACD histogram on the upside. The upward swing of signal indicator. This looks promising.
Third, 1-hour time frame.
The 1-hour time frame – you can use to draw the support and resistance lines, find the trend pattern that will identify whether to go long or short. In this case, looking long. All moving averages are below candles. This would look good with more volume to push it through $6800.
Fourth, the 5-mins and 15-mins time frames.
Thirdly, the 5-mins and 15-mins time frame – you can use time frame to find the entry and exit levels, stop loss, target, and area of value. Use any one the time frame either 5 mins or 15 mins.
Lastly, never trade in 1-minute time frame unless you are an experienced day trader. You can make strategic trade in less volatile time frames. The best time frame is 3/5 min (low freq).