F. What research are the time windows and key times based on ? Im just doing a bit of my own research in this area. What is your personal thought why there is increased trading around these times ? Cheers...mike.
Hi Mike
I started scalping the EU over 10 yrs ago using bollinger bands along with oscillator indicators - like the RSI and the williams %. I was fairly successful at it but started to notice how many scalps I would take around certain times of the trading day.
I then got into linear regressions and the infamous LR2 on Intellicharts Pro - that used to act as a leading indicator - by changing prior to the frame change - ie a 4 hr candle would see this LR2 change to give a view at say 3hr 59minutes and 58 seconds and then say price bias would be up or down for next 4 hrs.
The fact that I was still spending so much time scalping on the 1 min frames I started to notice the effect of time on changes so much more. Before I went full time I must have spent easily a good few thousand hours on the 1 min frame and so was starting to read the "detail " so much more.
Traders like to confirm new entries normally after the hour change - whether they are using the 1 hr chart or the 3 or 4 or even 8 hr chart - so I started to note the lags on entries and exits. Of course - they also exit many existing trades and take profits just before the hour change
After another year or so - I found a strong links to Key times of the trading day and I have now been using them for nearly 7 years.
Some trading days - they are spot on - other days they might be one or two mins out of sync - so thats why instead of just 6 KT's I have 2 TW's as well - which encompasses the 6 times.
So in the 2 x18 mins TW's of the hour - ie 36 mins - I take maybe 90% of all my trades and maybe 80% are at the 6 KT's of the hour. Some will only give me 3 or 5 pips - others - ie normally at strong S & R levels might give me 15 - 25 - even 100+ pips - without the move being breached at its entry or within 5 -7 pips.
I am sure over the last 7 years with the emergence of more automated trading via algos etc - and of course HFT - time is a component in the buying and selling equation.
Time alone with not work on its own - but its another clue that again gives you another "edge" to assist you with taking a trade with a high probability.
All FX traders know the importance of the London Open and also ninety five percent or so of all news announcements are normally released on the hour or half hr.
Another important part to remember is that its only the charts under 1 hr or 60 mins that are the same - all around the world for any trader in any country. If you use a 2 /3/ 4 hr or daily chart - it's candle or bar patterns can look different all depending on which broker and which open and close times they use - ie Midnight GMT or another important World time from the West or East.
So for me 30 min and 60 mins time changes are the most important times for trading - forget the 4 hr or daily or weekly etc etc- they are all for fortune tellers ;-)
Look forward to hearing from you if you also come across any other real key times of the 24 hr trading day that don't already fall into my time windows. I know of 2 but still maybe only take less than 5% of my scalps at those 2 times
Regards
F
