Timeframe scale

The timeframe is how much time each candle summarises. On a daily chart one candle covers a day, on an hourly chart one hour — a single daily candle is twenty-four hourly candles compressed into one shape. The same market can look entirely different at different timeframes: a move that looks like a sharp sell-off on the 15-minute chart may be nothing more than a small lower wick on the daily. That is why you must always know which timeframe you are looking at and keep your reading consistent with it. The common misreading is to believe one timeframe is "real" and another "wrong"; they are different resolutions of the same data, like photographs of one scene taken from different distances. A timeframe never tells you which view is the true one, only at what scale you are looking. For risk literacy the most expensive mistake is to take a small move on one timeframe for the big story of another — without the scale, nothing sensible can be said about the size of a move.

This content is educational information, not personalised investment advice. The chart examples are illustrative.

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