The daily timeframe (D1) is often considered the “best” or most optimal timeframe for a significant number of traders, particularly those who are not full-time professionals or who prefer a more balanced approach to trading. It strikes a powerful balance between filtering out market noise and providing sufficient trading opportunities.

Here’s why the daily timeframe is highly regarded:

1. Filters Out Noise and False Signals:

   • Compared to lower timeframes (e.g., 1-hour, 15-minute, 5-minute), the daily chart is significantly less prone to “market noise” – random, short-term price fluctuations that don’t reflect underlying market sentiment.

      

   • Candlestick patterns, support and resistance levels, and indicator signals are generally more reliable and less prone to false breakouts or whipsaws on the daily chart because they represent a full 24 hours of market activity and sentiment.

2. Clearer Trends and Structure:

   • Longer-term trends are more evident and robust on the daily chart. It’s easier to identify the overall direction of the market without getting confused by minor intraday reversals.

   • Key support and resistance levels (event areas) tend to be stronger and more respected by the market on the daily timeframe, as they reflect more significant battles between buyers and sellers.

3. Reduced Stress and Time Commitment:

   • Trading off the daily chart means you typically only need to check your charts once a day, usually after the daily candle closes (e.g., at the end of the New York trading session). This frees up a significant amount of time compared to intraday trading, which demands constant screen monitoring.

      

   • This reduced screen time lessens the emotional toll and stress, promoting more disciplined and rational decision-making by removing the temptation to react to every short-term price fluctuation.

      

4. Sufficient Trading Opportunities:

   • While it has fewer opportunities than very short timeframes, the daily chart still provides a consistent stream of quality setups for swing traders. It’s a sweet spot: enough action to stay engaged, but not so much that you’re overwhelmed or forced to take lower-quality trades.

   • Compared to weekly or monthly charts, the daily offers more frequent entries and exits, allowing for better capital rotation.

5. Good Balance for Swing Trading:

   • The daily timeframe is ideal for swing trading, where trades are typically held for a few days to a few weeks. This allows traders to capture significant portions of medium-term trends without the extreme patience required for long-term position trading.

      
      

6. Lower Transaction Costs (Relatively):

   • Fewer trades naturally mean fewer commissions and spread costs compared to high-frequency intraday trading. This can improve overall net profitability.

7. Reflects Broader Market Sentiment:

   • A daily candle encapsulates the cumulative sentiment of all market participants over a 24-hour period, providing a more comprehensive snapshot of supply and demand dynamics than any shorter timeframe can.

      

In summary, the daily timeframe is often considered optimal because it offers a highly effective balance: it provides reliable signals and clear market structure by filtering out minor fluctuations, while still presenting enough actionable trading opportunities that fit well into a busy lifestyle, making it a sustainable and less stressful approach for many traders.