When is the best time to trade Forex?
In this video:
00:49 Trade when it suits you
02:38 The way that I trade normally when I’m at home or travelling
05:20 Getting the most price action
In this video and podcast I want to explain some information about when you should trade because it’s a question that I get asked quite a lot. So let me explain more in detail right now.
Hi traders, it’s Andrew Mitchem the Forex Trading Coach. Today is Friday the 13th of June so hope you’re okay on Friday the 13th.
I want to talk about when you should trade. Because as I mentioned, I get that question asked so much, especially by people who are not clients; people who are maybe new to trading and people say, “Look Andrew, when should I trade and when is the best time, what time frame should I trade?” and a lot of questions like that. And really the answer, it’s probably not what they want to hear but the answer that I mostly give is look, trade when it suits you.
You see, there’s no right and wrong time to trade. Of course if you’re trading, maybe let’s say, shorter time frame chart trades and you’re entering a position in the market, ideally it probably you want to be trading when there’s likely to be more activity in the market. So possibly like into the European session or the US session if you can. And I do have clients who trade maybe for 1-3 hours in a session and they’ll be looking at charts, say like 15-minutes, 5-minute charts and 1-minute charts and they’ll be looking at those shorter time frame charts; looking at predominantly market orders entering at the market straight away based on candle patterns and chart setups that I teach them and that’s also how I trade when I’m trading on my live webinars which I hold for my clients every two weeks because we’re on there, live and we’re looking for a number of trades, if they show during the session.
In fact I also had an email overnight from a client in the US who took a 5 to 1 return trade, a 5 to 1 reward to risk on a 1-minute chart trade just yesterday and when you think about that that’s a pretty amazing return. He was trading half of 1%, let say, on that trade so only half of 1% yet his return was five times that so his return was 2.5% return gain on his account from just one trade with very low risk on a 1-minute chart. So it shows what it can be done if you’re the sort of person who enjoys trading those shorter time frame charts looking for the good setups. But of course you do need to accept that to trade 1-minute charts you need to be there right then at the market taking the trade.
The way that I trade normally myself when I’m at home here in my office, I’ll trade 1-hour chart trades during the European session if I see any good setups then I’ll trade 4-hour charts and I’ll trade daily charts.
On top of that I also trade weekly charts just once a week at the beginning of the week and I also look at the monthly charts when the month changes over. And if I’m travelling, let’s say and I’m away on holiday, I don’t want to be looking at charts all day long you know I can do that here behind me right now. I don’t need to be doing that way when I’m away on a holiday or I’ve got meetings or whatever it might be and same for you if you have family activities or work commitments or travel, holidays, whatever it might be you don’t have to be looking at the charts all day and long; you don’t need to.
You can use limit orders. You know I used a lot of a buy and sell limit orders, a pending orders to enter at the market if the price reaches your chosen price entry and of course you have your stop loss and your profit target and your risk all factored in. So you don’t to be there when the price gets to that level if you use limit orders- they’re a great way to trade if you don’t want to sit watching your charts all day.
So when I’m away I’ll trade monthly charts, weekly charts and each day just look at the daily charts at the close of the 5 pm New York close of day and then during the rest of the time I’ll then look when I’m at home 4-hour charts, 1-hour charts. The only time I actually trade anything shorter myself is on the live webinars with my clients. When I will look at like 5-minute charts or 15-minute, 5-minute and 1-minute charts but really they don’t suit me as a trader quite so much.
So, to answer the question that so many people do ask, “When is the best time to trade?” Well it is when it suits you, because all good trading needs to be something that you enjoy and it needs to be something that you can sustain. It’s all well and good let’s say you’re making let’s say 5% gain in a week but you’re committing 10 hours a day of watching 5-minute chart trades. Realistically, that’s probably not that enjoyable and realistically it’s not sustainable over time.
That’s one of the reasons why I think you either need to take the longer term approach like I do or like many of my clients do and I’ll teach and my system and strategy works across all time frames, but a lot of my clients do chose to trade 1 to 2 maybe 3 hours a day looking at the shorter time frames at the time of day that suits them.
Like I mentioned, ideally if you’re going to trade that way you should be looking ideally in the European session or the US session because that’s the likelihood of getting the most price action. If you trade longer time frame charts, use pending orders, it really doesn’t matter. For me trading the 4-hour charts I just need to be at my computer once for let’s say, five minutes no more, every four hours and it’s very easy to plan your life and your day-to-day activities around that because right now I’ve just looked at the 4-hour charts around ten minutes ago. I now know that I’ve got well over 3.5 hours before I even need to think about coming back to my computer again. So it just allows you to do other things in the day.
So I hope that has helped you and trade what suits you as a personality, as a trading personality, time available, stress, etc. depending on how you feel about those different things. You’ll soon get to realise what time frame charts and what time of the day suits you the best.
This is Andrew Mitchem from The Forex Trading Coach. I look forward to talking to you this time next week and don’t worry about Friday the 13th. Bye for now.