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Time And Timing In Day Trades - Understanding The Cycles And The Perfect Times To Trade Futures And Forex
It is of supreme importance to grasp the time that you choose to trade in and know what you can potentially expect at that time of day.
It is different for each instrument so it is important to study market behavior for your particular instruments. I ordinarily trade only 3 instruments the DAX, Euro/USD and the GBP/USD and am familiar with their patterns throughout the trading day. Other vehicles act differently therefore I will only trade them (and I do sometimes trade S&P, WTI, , and other currencies) after I've examined their time related behavior.
Timing issues are complex to crack and occasionally it's easier to buy a trading system, not so that you can follow it blindly but instead use it to complete your own interpretation of the market. Always best to read forex trading system reviews. A systems I use regularly to supplement my decisions is forex rebellion. It fits in nicely with my MT4 setup and adds confirmation to the timed entry.
The best time to trade the DAX is close to the London open at 03:00 EST, as the open regularly brings a massive volume surge and it's simple time to scalp.
It is routinely possible to achieve a gain of 20 - 40 points in the first 30 minutes of trading. As my daily target is 30 points and it is often hit within half an hour, I can then take it easy and search for absolutely perfect set ups that will not risk the gain.
Another good period to trade the DAX is around 13:30 UK time (08:30), but need to look out for any news announcements as this is the time most US releases come out (CPI, GDP, NFP etc). It it a pretty volatile phase and once again it's easy to capture good set ups then.
About 1 hour after the markets open (London and NYC) we normally see consolidation and I tend not to trade these times, it can be quite tedious.
I'm sure you've noticed how fast the time goes by when you are in a trade that is in the red and how slow it is when a trade you've entered just refuses to move.
Of course it's the same period of time, it's just our mind playing games with us. To my mind, I expect a trade to move my way within 2 bars (1 min, 5 min or any other time frame you trade). If it doesn't I'd rather exit the trade and wait for a better opportunity. My experience is that if a trade doesn't move your way quickly, it is a less probable trade. Wait patiently before entering a trade and not after you've entered it.
Timing is a separate topic and depends on your trading methodology, one of the methods I use, is reversals at known pivot points. This is a rubber band sort of trade and routinely you can catch a turnabout and a new short term trend.
Under these circumstances, with scalping, if you have a particular price area in mind, timing makes a big difference, enter too soon you may get stopped out, and if you enter when the price has moved you will miss out.
Therefore, remember that trading is 90% is a mental game, and if your mind is not focused or you're not in a good state it's best to stay out, better to recover, and then resume.
I use meditation, and continuously make sure I am completely calm and confident before I trade. Lately I've been using a subliminal video and I find it's pretty good, 10 minutes of watching and I am ready to make money effortlessly.
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