The time frame or periodicity of the price graph refers to the duration of a single bar price. This timeframe can be any value from a second to a year or more, depending on the amount of data available. The longer (big) timeframe, the less the number of signals that the graph will produce. This is because a 5 minute chart will form the bar price six times more than the 30 minute price chart. Thus, the indicator applied to the 5 minute chart will change and move six times faster than the same indicator with the 30 minute chart.
Choosing a specific timeframe that you will use for trading is important because it will suit your personality and trading style. Some traders prefer trading from a 5-minute chart with a relatively high trading frequency, while others will choose a quieter 30-minute graph that smooths the 5 minute “noise” graph.
Many beginner traders are led to believe that a shorter timeframe is a “money factory”, even successful traders using longer timeframes can be tempted to switch to shorter timeframes. However, shorter timeframes are not always more profitable. This is more difficult to trade because the time available for traders is very little to make trading decisions.
It is not easy to find entry level, stop level and target level with volatility at faster and shorter timeframes. The smaller (narrow) range indicates slipage will often reduce proportionally proportionate returns. Slipage that occurs during entry and exit will also reduce your RRR ratio. This is what makes the small timeframe less attractive compared to the big timeframe for most traders.
Furthermore, changing the shorter and faster timeframes can be a painful and costly experience as traders have to adjust to faster moving price charts. Often traders will not be able to make this adjustment successfully. They move longer, and slower.