It is really not necessary to sit in front of a computer scanning charts through out the day. The FX markets open each day in Asia and Australia and end at 5pm New York time. It is the ‘End of Day’ closing price, which gives the important information needed to trade the daily charts, telling you whether it is the buyers or sellers who have won the day, or whether they’ve been locked in a stalemate. Thirty minutes to an hour is all that is required to scan the end of day results on the daily charts and discover the winners and losers in your favourite currency pairs.
The daily charts have the advantage of distilling the day’s movement in one bar. These means you are not glued to the lower time frames trying to anticipate and catch trades amongst the noise of erratic movements. You really can relax knowing you only need to check the charts once at the end of the day to see everything you need to know to inform yourself of whether to trade or not. This approach really does give those with time constraints an opportunity to trade; and time constraints are a good thing in trading. There is nothing more likely to encourage impatient over trading and frustrating losses than spending too much time searching the charts for that ‘must take’ trade. Trading, as we all know, requires discipline and a consistent approach. End of Day trading, with its ‘set and forget’ style, helps prevent bad habits and ill discipline instead offering a simpler and much more detached approach. This is far more likely to yield results.
So, let’s just sketch out a hypothetical time schedule and how trading an ‘End of Day’ strategy might affect it.
8am: Briefly scan the market in the morning after you have woken up, showered and eaten breakfast (don’t do it until you’re fully awake and ready to roll). You are going over what happened while you were sleeping, looking at how the price action of your favorite markets reacted near key chart levels or if any price action setups formed in-line with the trend. If the markets aren’t doing anything meaningful and there are no obvious setups from key levels or with trends, then close up your charts and get on with your day.
9am – 5pm: Work, business, gym / daily activities, etc.
Around 9pm or so spend another 20 or 30 minutes scanning the 4 hour and daily charts, essentially doing the same thing you did in the morning; go over the price action that occurred during the day while at work, see what happened. Did any obvious setups form at key levels or in-line with any trending markets? If the New York close occurred while you’re at work, be sure to check and see how the daily chart closed, or if this happens overnight for you, be sure to check it in the morning (depends on your time zone). Again, we are doing the same thing as in the morning: checking the price action in our favorite markets and looking for any obvious price action signals that may have formed, with a focus on the daily and 4 hour chart time frames.
This is an example of how a typical trading day can go for you if you adopt this laid-back style of trading. Of course, the above example presupposes that you have a solid understanding of how to trade with price action and that you have mastery of a few solid price action trading patterns in your trading toolbox, but once you obtain that knowledge, you can easily implement a daily trading routine like the one we just discussed.
Moving forward, it is no secret that I am a huge proponent of end-of-day trading methodologies and trading the higher time frames (4 hour and daily charts). I have traded end-of-day strategies successfully for more than 12 years, so it’s no surprise that my trading courses and tutorials are focused on end-of-day price action analysis and trading daily charts. Trading in this manner will give you clearer and higher probability signals with more free time, and help you achieve complete mental clarity. After studying my trading strategies and philosophies I have witnessed many transform themselves from ill disciplined trading addicts with nothing but a losing track record, into professional minded traders who trade a low-frequency end-of-day trading model.
Editors’ Picks
EUR/USD clings to gains above 1.0750 after US data
EUR/USD manages to hold in positive territory above 1.0750 despite retreating from the fresh multi-week high it set above 1.0800 earlier in the day. The US Dollar struggles to find demand following the weaker-than-expected NFP data.
GBP/USD declines below 1.2550 following NFP-inspired upsurge
GBP/USD struggles to preserve its bullish momentum and trades below 1.2550 in the American session. Earlier in the day, the disappointing April jobs report from the US triggered a USD selloff and allowed the pair to reach multi-week highs above 1.2600.
Gold struggles to hold above $2,300 despite falling US yields
Gold stays on the back foot below $2,300 in the American session on Friday. The benchmark 10-year US Treasury bond yield stays in negative territory below 4.6% after weak US data but the improving risk mood doesn't allow XAU/USD to gain traction.
Bitcoin Weekly Forecast: Should you buy BTC here? Premium
Bitcoin (BTC) price shows signs of a potential reversal but lacks confirmation, which has divided the investor community into two – those who are buying the dips and those who are expecting a further correction.
Week ahead – BoE and RBA decisions headline a calm week
Bank of England meets on Thursday, unlikely to signal rate cuts. Reserve Bank of Australia could maintain a higher-for-longer stance. Elsewhere, Bank of Japan releases summary of opinions.
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