Benefit Of Trading End Of Day -We receive emails from traders asking how they can trade on the market with their busy schedules, or that they are too young to spend all day watching the markets. As a result, my response is usually something along the lines of: “Well, if you learn end-of-day Forex strategies, you won’t have to sit in front of your computer all day.”. It does not have to be the exact time of the New York close, but generally, there’s a large window of time between the New York close and the London open (the Asian session) during which you should analyze the daily charts and make trading decisions. I am referring to this as “end-of-day trading”. There are many Benefit Of Trading:
Keep your day job
The First Benefit Of Trading basically allows you to work around your schedule and fit in trading at the end of the day. The day job won’t cause any problems for you. The idea that traders cannot trade because they cannot watch the markets all day is simply false.
A ‘hidden’ advantage of end-of-day trading is being away from the market -this can actually benefit you. Having a filter against over-trading is a natural consequence of not being as involved with the markets, and this will likely increase your bottom line at year’s end. The long-term profitability of low-frequency traders is statistically higher than that of high-frequency traders.
Traders can live their lives as they have always done, but instead of watching TV for 30 minutes at night, they can analyze the markets according to their trading plans and look for price action trading setups at the end of the trading day. There is no truth to the claim that it is too good to be true; once you learn an effective trading strategy and develop an effective trading plan, you do not have to spend hours each day analyzing the markets.
Less clutter on your charts and in your brain
Second Benefit Of Trading is that human mind is prone to oversimplifying the trading process. Obviously, I am not suggesting that trading is easy since we all know it isn’t easy to make money consistently in the markets. In fact, most people make trading a very complicated process, especially when it comes to the analysis part. The most challenging part of trading is remaining unemotional and taking profits. In markets, the decision to enter or not to enter comes down to one thing: there’s either a signal or there’s not.
You must establish a trading plan for your effective trading strategy like price action after being taught and mastered. As soon as New York closes each day, you’ll be able to observe if your trading edge is still present. Developing this into a routine shouldn’t take you more than 30 minutes or so to determine whether the signal is worthwhile to trade. Many traders email me every day to express frustration and confusion, afterward telling me they use forex indicators all day long and follow the markets constantly…they have a hard time seeing the forest for the trees! Therefore, they are overcomplicating the easiest part of trading, analyzing the charts, and searching for a trade signal, which is why they are frustrated and confused.
More ‘bang for your buck
Benefit Of Trading in end-of-day on a daily chart is that, you are more productive and efficient in your time management. In addition to using daily charts since they carry more ‘weight’ than intraday charts, you can easily check the markets for a signal after the close of NY, then walk away. There is a great possibility that any signal you find, even if it came earlier in the day or night, will be much more significant than an intra-day chart signal found earlier. By reading the daily charts instead of sitting at your computer all day trying to trade intraday charts, you are taking advantage of spending less time in the markets.
HOW to trade end-of-day
The question I hear more often about end-of-day trading is “How do I do it?” or “What does it involve?”? If you email me about it I will refer you to this article ;)! This next portion should answer these questions in detail. The following are four steps when trading Forex at the end-of-day (or any other market):
You only need 30 minutes a day to analyze the markets and find your entry or manage your trades:
You can only execute your trading plan once you have a clear indication that one of your setups has been confirmed. We should be able to master your trading strategy within 10 to 15 minutes once you have mastered it. When you look for an advantage on a daily chart time frame, the edge usually becomes evident. Having analyzed the markets for approximately 10 minutes, there is probably nothing worth investing your money in. By continuing to look for something that isn’t there even though they aren’t seeing a signal right away, a trader can get into trouble. You have to avoid falling into this trap of digging up something to trade when there is nothing ripe before your eyes.
Finding levels –
Compare a signal to a level; if you find an obvious setup, the next thing to look at is whether it lines up with any obvious level(s). Each day after New York closes, you’ll need to draw in the key levels on the daily chart and then analyze and adjust them as needed. As soon as you understand what an important level is and what is less significant, this won’t take much time. An example of drawing support and resistance levels is shown in the video below.
When gauging market conditions, do you observe a trend or a consolidation…?
It’s trending, but is it strongly trending, or is it slowly grinding higher or lower? Are there distinct trading ranges on the market? In what direction does the trading range have its obvious key boundaries? If you are signaling, make sure the market conditions match the signals you are providing. It’s not recommended to use a decent-looking pin bar strategy if it’s going against a very strong trend.
Write your own daily commentary –
An objective view of the charts each day is gained by writing a commentary about your favorite markets. You should follow the guidelines in your trading plan and make notes of what you see on your favorite markets each day. You can actually type or write it out so the habit becomes automatic. If nothing really stood out to you after finishing your top 5 or 10 favorite markets, go back over your comments and re-read them. With this process, you will give yourself a good overview of the current market situation so you can discern what’s really worth trading… it’ll help you stay ‘in touch with the markets and allow you to develop your discretionary trading sense. A key factor in my success in the markets was this.
When you’re done, you’re done –
Once you go through your daily ‘end-of-day routine’, you have two possible outcomes: there’s either trade or there’s not. Either way, you should walk away. You either enter your trade parameters or you do nothing, and either way, you should leave your charts until the next day, then come back and see what happened. This act alone will almost completely cut out the temptation to over-trade, which is most trader’s biggest downfall. You aren’t going to help anything by looking at the markets and staring at your trades. Sure, you might nip a couple of would-be losers early, but in the long run, you’re only going to end up cutting your winners short, closing trades at breakeven, and generally just interfering in your trades when you shouldn’t.
This 24-hour break from the markets shows that you release your arrogance and that you truly understand you can’t control the markets. Let the market do the work for you, you should have already accepted your risk on the trade…you should basically assume you are going to lose on the trade, so that every time you come back the next day and see a winning trade it’s a nice surprise, and a loser is not a disappointment but rather something you already expected. It’s when people expect to win on every trade that they start becoming emotional.
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