Updated on March 15, 2023
Frequency refers to a given time period with regard to trading routine or repetitiveness of a certain transaction. This is generally talked about in the context of different time frames – intraday, daily, weekly, monthly, quarterly, semi-annually or yearly. While checking for longer time frames, picking a weekly or monthly data set will make it easier to identify long-term trends. Daily charts and short-term time period charts are useful for active traders.
Frequency is also used in the context of High-Frequency trading, or HFT, which is a method of trading which uses computer programs for processing very large transactions and a high number of orders within fractions of seconds. HFT uses algorithms for analyzing trends and other data for executing orders based on market conditions. Generally, traders with the fastest execution speeds are more profitable than traders with slower execution speeds.