There are a number of themes on BP that continue ad infinitum, such as “why do traders lose”. I guess there are two main reasons for their continuance, a) there is a constant stream of newcomers to the business and b) there is no single answer to the question.
One of these themes is what timeframe is the best and most profitable. This question in particular sits right on the interface between newcomers and the experienced community - and one could expect to see some very consistent answers from the respondents to this issue. What is surprising, though, is the what we usually do see is a full range of recommendations ranging from scalping to daily, even weekly, timeframes.
What does this tell us about this issue (apart from the questionable basis of some of the replies!)?
In my opinion, asking “what is the most profitable timeframe” is asking the wrong question. In the same way that there is no single answer to “what is the best system/method/approach”.
Personally, (and that is why I normally only write here in the BP backwaters), I think the real spotlight should be shone on oneself and ask “What is right for me”? What kind of trading suits me and my character and my circumstances. Trading methods and characteristics are “bespoke tailoring” to the individual and what sits well on one person will only cause discomfort to others.
Another factor to consider is that both our characters and our circumstances change over time and so will our trading patterns - again there is no single homogeneous answer.
Another issue concerns the markets themselves. They change. Sometimes gradually, sometimes suddenly. And all timeframes carry their own general and specific risks. Some even extreme, such as being caught with open positions over a weekend by a black swan event on Monday gapping miles through your stop level. Rare but real!
So, in my opinion, the issue is find out first what trader shape you are and then tailor your wardrobe to fit it.
There are also many variations that don’t get looked into very deeply. For example, we often talk about “day-trading” without specifying what we mean by that. To some it means scalping (many positions, small pip amounts, large position size, etc), for others it means trading mini-trends off 15m-1m TFs (2-3 trades per day, 10-50 pips average, etc). In the same way, using daily charts often suggests trades that last maybe 2-30 days.
But there are also hybrid methods. For example, I know that I cannot carry trades for more than 2 days max - I don’t like the pressure of constantly having open trades and I hate seeing a promising-looking trade with a nice open profit suddenly crash to my stoploss after a few days of monitoring it! But I am quite happy with a trade that crashes immediately after entry. It happens, and it is built into my risk/money management parameters. But when it happens, it is over, forgotten, and I move on to the next! But that is just me, equally, it is not ok for others, who might get sucked in psychological stress and the resultant loss of confidence and even revenge trading, throwing the rule book out the window.
But hybrid trading models offer a cross-breed model. I do not personally find day-trading consistently profitable when just using short-term charts (and I have primarily been a day-trader a long, long time). I also need the background “big picture” to provide the necessary selectivity when considering trade set-ups as well as for defining sensible areas for targets and stops.
If you like, my personal hybrid approach is based on taking bite-sized chunks out of the overall on-going move (and whether there actually is an on-going move!). But even this is not clear-cut. All trends wax and wane and that is no exception with long term moves either. And end-moves do have a habit of collapsing faster than the gradual build-up during the trend. So taking smaller chunks from a longer term move is also dangerous when that underlying move is ending.
Watching the underlying trend does not inhibit trading against it on a day trade basis, it just means that the risk/money management rules should compensate for the additional risk and the targets should also be more conservative - i.e. tailored to the circumstances. For example, a day-trade signal that lines up with the daily/4-hour chart might be open-ended with an EOD close and with a trailing stop, which is moved to B/E after a certain point. But a 1-hour chart day-trade against the “big picture” might be half-sized, with a limited target point and a tighter stoploss such as above a previous high.
Just examples. My point being that the “best method” is individual-specific and not a universal. Even if what one trades is not potentially the most profitable in theory, it is still the best option if it suits your circumstances and personality. If it works consistently for you then it is only an issue of position size to make it worthwhile.
Be creative, search the alternatives, know your trading “body”:
“Bespoke tailoring is a traditional way of making clothes by hand on the basis of an individual pattern. A pattern is the construction plan for the different parts of a garment created with body measurements, which take into consideration the unsymmetrical shape of the human form”