Timeframes: zooming in and out
The same price can be drawn as 1-minute candles or 1-day candles. Bigger candles are just smaller ones added up.
How much time is one candle?
The tells you how much time each candle covers. Common ones:
- 1 minute and 5 minutes: for very fast traders.
- 15 minutes and 1 hour: for traders who trade during one day.
- 1 day: one candle per day. Great for beginners and investors.
- 1 week and 1 month: the big picture.
Bigger candles are smaller candles added together
Four 15-minute candles make one 1-hour candle:
The 1-hour candle:
- opens where the first small candle opened,
- closes where the last small candle closed,
- has the highest high and the lowest low of all four.
It's like a map
Think of zooming in and out on a map app. Zoomed out, you see the whole country (the weekly chart). Zoomed in, you see your street (the 5-minute chart). Same world, different detail.
Good traders always check the bigger timeframe first, so they know which way the big picture is going, then zoom in to pick their spot.
Remember
- The timeframe is how much time one candle covers.
- Bigger candles are just smaller candles combined.
- Look at the big picture first, then zoom in.
Check yourself
1. Four 15-minute candles make one candle of what timeframe?
2. Where does the bigger candle close?
3. Which timeframe should you check first?
Next lesson: The story inside each candle
Money Tree School is education, not financial advice. Examples use made-up or historical numbers to show how things work; they are not recommendations to buy or sell anything. Markets can lose money.