I would like to know the ideal time frame for chart analysis for Intraday, Short term and Long term investment. Besides, please advise the common indicators to plot in the chart for the above mentioned investment analysis
Some ideal timeframes that I use,
For Intraday : 5 mins/ 15 mins
For Swing: 1hour
For Short Term/Positional: Daily
For Medium Term: Weekly
For Long Term: Monthly
Some indicators that are easy to understand and work well are Simple Moving Average (SMA), Bollinger Bands, RSI, Stochastics and some community scripts to guide you with the key levels.
- Intraday: 15min or 1hr(equity), 4hr (commodity)
- Short term: Daily
- Long term: Weekly
The choice of specific timeframes, generally, depends on the comfort level of a technical analyst. However, it is observed that most people prefer the above time frames.
Traders are tempted to move to lower timeframes (e.g. 3min or 1min) in a bid to catch major price reversals, early on. However, there is immense volatility observed on such timeframes. This could lead a trader to taking unnecessary trades and stop loss being hit.
Indicators: Relative Strength Index (RSI) is one of the widely used indicators. It is a leading indicator i.e. could give signals even before the price does. Further, you could use RSI divergence on weekly timeframe to identify major trend reversals.
Hope this helps.