Jay Norris, Senior Market Strategist and Forex Educator
One of the things that makes trading so difficult for most people is that feeling of having no control. One very important aspect of trading which you do have control over, which you may not realize is: watching the clock. Clock watching is even more important than support and resistance — because it’s how price reacts over “time” to these levels which is critical. Clock watching is right up there with change-of-direction in trading importance. In fact it’s time — the clock– which is an essential component of trigger. Without the knowledge and patience of knowing when to pull the trigger, what good is discipline?
The clock is so very important because it gives us trend (direction) on the time frame we are trading, and it also gives us trend on the higher time frames. If it is 8:01 AM and the 7AM candle closed below the appropriate price point and trend line, we can say that by definition the trend on the 60-minute chart is lower. But if the trend on the 240 minute chart is below its appropriate price point, but has not closed below it, we can NOT say the trend is down, YET. We have to wait for the clock — for the close of that candle. Whether you know it or not the markets stance at these time junctures is very important information to have, in fact it is time which gives us the appropriate price level which we judge trend on — it tells us which direction trend is in NOW.
The most crital time periods do not vary either, with the exception of twice a year when we adjust our clock back in the fall and forward in the spring. The Daily close at 4PM ET is one of the most important times, followed by the end of the 4 hour periods starting at that 4PM ET time. So 8PM, Midnight, 4AM, 8AM & Noon ET mark critical junctures when many profesionals analyze and adjust thier positions. On the hour are also critical junctures particularly coming out of Asia thru the Mid-East and into London. Other than for economic releases 1/2 hours are not as critical, though 15 minute increments are important for intraday traders. Following the ebbs and flows of the markets by following the clock is a powerful technicque and one of the first things we teach our clients who need help in determining which market to trade, which direction to trade it from, and when to trade. Once we can get them to trade based on fact based triggers as measured by price and time — clock watching – it’s a short step to building their confidence in a demo account or with micros.
Don’t be a trader who gets distracted with non-essentials for the sake of control, be a trader who focuses on defining your set-up and time-based-trigger and the rest will fall into place.
Contact Jay Norris
To attend a complimentary 1/2 hour tutorial on how to use time to improve your trade selection call or e-mail Jay at firstname.lastname@example.org to set up an appointment during U.S. business hours.
DISCLAIMER: Forex (off-exchange foreign currency futures and options or FX) trading involves substantial risk of loss and is not suitable for every investor. The value of currencies may fluctuate and investors may lose all or more than their original investments. Risks also include, but are not limited to, the potential for changing political and/or economic conditions that may substantially affect the price and/or liquidity of a currency. The impact of seasonal and geopolitical events is already factored into market prices. Prices in the underlying cash or physical markets do not necessarily move in tandem with futures and options prices. The leveraged nature of FX trading means that any market movement will have an equally proportional effect on your deposited funds and such may work against you as well as for you. In no event should the content of this correspondence be construed as an express or implied promise or guarantee from B.I.G. Forex, LLC and Brewer Investment Group, LLC or its subsidiaries and/or affiliates that you will profit or that losses can or will be limited in any manner whatsoever. Loss-limiting strategies such as stop loss orders may not be effective because market conditions may make it impossible to execute such orders. Likewise, strategies using combinations of positions such as “spread” or “straddle” trades may be just as risky as simple long and short positions. Past results are no indication of future performance. Information contained in this correspondence is intended for informational purposes only and was obtained from sources believed to be reliable. Information is in no way guaranteed. No guarantee of any kind is implied or possible where projections of future conditions are attempted.