As Long as the Candle is Burning

Our clients often ask technical support about how to know the time frame for which a candlestick is built. Here we will tell you where you can find the settings for this and how to use it.

Firstly, let us begin by explaining what we are talking about. On a candlestick chart, you can set up different periods that will be reflected in a candle: for example, 5 seconds or 24 hours. It is convenient because different traders need to see the chart at different scales.

Where to find this setting:

Check here how it looks like in the mobile app:

And here the desktop version:

You will see this setting only after you select a "candlestick" or "bar" chart here:

Usage

Candles and bars are the most efficient and straightforward methods for fast analytics because all you need to do is to watch for the price only. There are five basic parameters of candle formation. They are straightforward: Open, Close, High, Low, Time Frame.

Today we will review the last one: Time Frame.

So, what is Time Frame and how to work with it?

Time Frame is the period for the price aggregation for candles. A user sets up this time frame, and usually, it is fixed and simple: 30 seconds, 1 minute, 2 minutes, etc. And the fact that it is fixed allows denoting price patterns of the asset very efficiently. Plus, it helps to determine the best expiration time of your future trade.

Picture 1. Setting up a time frame for one candle on IronTrade.

As we can see in picture 1, a table with time frame specs is located in the bottom right corner near the trading history and a chart scale. On IronTrade, we have the timeframes from 5 seconds to 2 minutes available. IMPORTANT! If you've chosen 30 seconds (as in picture 1), each candle will be 30 seconds long until you set up a different time frame (e.g., 10 seconds).

Why do we need candles?

As an instrument, candles help you to plan the time to make a trade. It works very well for technical analysis and forecasting the price movement in a specific time period.

Picture 2. Signals from candles in case you plan to set up the expiration time to 30 seconds.

As we can see in picture 2, the total number of candle signals is 26: 13 up and 13 down. Such a strategy provides a basis for more difficult ones: for example, with the usage of SMA or RSI.

Here are possible variations:

We follow the trend and open trades UP after each 1st red candle and after each 1st green one (as we see in picture 2). With such a strategy, the probability of profitable trades is 53,8%, which means about 54 profitable trades per every 100 trades.

Moving against the trend with the use of Bollinger Bands (picture 3).

Picture 3. A candlestick price chart of an asset. We use 30-seconds-long candles and Bollinger Bands with the parameters of period = 4, rejection = 2.

In picture 3, we can see that the number of trades significantly reduced, but the probability of successful trades increased by up to 100% for this period.

Summary

• The candle time period is constant and depends on the chosen period in settings.
• Candles are very handy instruments of data aggregation. They have a good predictive capacity and can concentrate a long period of points in a brief and convenient format.
• Candles are a sound basis that increases the strength of technical indicators.