What’s the Best Time of Day to Place Trades?
In this video:
00:24 – When should I enter trades?
00:55 – How the FX day runs
01:20 – Do I have to trade the London and US Sessions?
02:12 – Is trading the Asian session a disadvantage?
02:32 – The way we trade at TFTC
03:04 – Look to take retracement orders
03:44 – Look at the close of a candle for a new trade
04:18 – The best time to place trades
05:14 – Ask me a question for a future video and podcast
What's the best time of day for you to place your trades as a Forex trader? Let's talk about that and more right now.
Hey traders, it's Andrew Mitchem here from the Forex Trading Coach with video and podcast number 336.
When should I enter trades?
And it's a question that I get asked very often, especially by newer traders. The question is this, is that, “Look, I know the market's open 24 hours a day. I know that it's open five days a week, but really what is the best time for me as a trader to go and enter my trades?” It's a confusing subject because as I said, we know it's a 24 hour market, but we also get told so often about different times of the day when there's more price action than less.
How the FX day runs
So the day starts in the Auckland session and then which is in New Zealand and through to the Sydney session, and through to Tokyo that's generally classed altogether as the Asian session, then as the markets then go through to the Middle East and then through to Europe, London and then across to the US with the New York market opening last.
Do I have to trade the London and US Sessions?
When you think about it, when it's say middle of the day here in New Zealand, it's the middle of the evening, the nighttime in London. So a lot of people think that that's a disadvantage because a lot of people think that they have to be at their computer when there are certain trading sessions going on. In other words, a lot of people think they have to be at their computer during the London session, so for me that means evening time. If you're in America, that means being up at two or three o'clock in the morning. Then also people leading on from that think they need to be there at the swap over between London and New York.
For me that's two o'clock in the morning also, and I'm not doing that. You don't have to do that. But you can see where the confusion comes because that's what people think they have to do. They have to be there when there's the most price action and volatility, and news announcements.
Is trading the Asian session a disadvantage?
Likewise, for people this side of the world, they think, “Well, it's my daytime during the Asian session. Well, nothing happens during the Asian session. It's usually pretty much dead.” The odd day something will happen, but most of the time, not a lot happens in the Asian session, and so people see that as a disadvantage.
The way we trade at TFTC
However, forget all that thinking and start again with the thinking. Because the way that we trade is that we only take a trade or look for a new trade upon the close of a candle.
It doesn't matter what the candle length is. It could be a monthly chart, it could be an hourly chart, it really does not matter. But the beauty of trading that way is you know when to go and have a look at your charts. So we know that the daily candles close at 5:00 PM Eastern standard time, that's New York time every day. So you know when to go and look at your charts.
Look to take retracement orders
Because of the way that we trade, we take retracement orders. We don't even have to take a market order. You don't have to, so you don't have to be there bang on five o'clock New York time or five 30 you don't have to be there right then. We're taking retracement orders, and the great thing with a retracement order is we're not even there at our computer when the trade gets filled because it gets traded, and entered, and filled when the price gets to the order level that we've already preset sometimes hours ago.
So it doesn't really matter what the session is when that happens because I'm not there anyway. I've set my trades up, I've set my orders up, and I let the market do its thing.
Look at the close of a candle for a new trade
Now, as I've mentioned many times, if you are trading say four hour charts, you know when to go and look at your charts. You look at the 5:00 PM New York time, and then you could look at nine or one, or five again, or nine. It depends on which of those you can or want to look at your charts. If you're trading 12 hour charts, you just need to look twice a day, 5:00 PM and 5:00 AM New York time, or just after that time. Again, entering with limit orders, retracement orders, you don't have to be there.
The best time to place trades
So to answer you the question about when is the best time to place trades, the best time to place trades is when you see the best set ups according to your strategy.
It doesn't matter what the day is, what the time of day is, what the timeframe chart is, or what the currency pair is. It's what's showing the best at the time according to your strategy. If that happens to be three o'clock in the afternoon, or 10 o'clock at night for me, it doesn't matter. It's when that set up's showing. But again, I don't need to be there three o'clock and 10 o'clock. I know exactly when I need to be at my charts. It's just twice a day. I can look at the trades, look at the set ups, are there any yes or no, and place them with retracement orders, walk away. So you do not have to be there during the London session, or the New York session, or the crossover, or any of that in order to take good trades.
So therefore, conclusion is the actual time of day that you place the trades does not really matter. Unfortunately, most people think it does, but it really doesn't. So I hope that helps.
Ask me a question for a future video and podcast
If you have questions like this that you'd like me to answer on future videos and podcasts just send me an email to [email protected], and I'd be glad to help you out. Bye for now.