What are the best Forex time frames?

Research in this area turns up a few things…

Monday through Friday are all viable for day trading. Thursday tends to be the best day for trending. Friday has some risk if you are looking for swing trades because you would need to hold over the weekend. Day trading on Friday is typically fine especially when there are news events to power the markets.

We have found that for day trading 2am EST – 4am EST (New York Time is always used in this document to standardize) is a solid time frame to trade. For a while, we didn’t see a lot of opportunity that was reliable between 4am – 8am EST but in recent months we have found that the 4am – 7am EST is another viable time frame, in particular starting after the news time frame (so 5:00am EST or after.) Just realize you will many times have economic reports that can dramatically alter the markets at 4am – 5am EST depending upon the economic schedule. After that, 7am EST – 11am EST is the final (US session) time frame. This is the case for the U.S. and European crosses. If you add the Asian crosses to the mix, then 6pm EST – 9pm EST is viable.

Should you for a minute attempt to trade each time frame? Personally, we’d say no. Focus on one, two if you must. And if you book a winning trade – shut it down. Move along. That’s your best bet. There is always another time frame; don’t panic that you’ll miss the next great trade. More than likely you’ll find your way to going from a profit to a loss either through a bad trade, a mistake or just the simple odds of trading and then you’ll have to take another trade, thereby raising the trading stress, and so on.

If the whole idea of day trading is unacceptable to you, and realize here we are probably talking on an average session an hour and definitely under two hours, you can of course swing trade. There are options to swing trade daily charts, four hour charts, hourly charts, tick charts, etc. There is always a time frame that will suit your lifestyle perfectly.

What about Index Futures?

For us, that’s fairly easy. From 9:30am EST – 12:30pm EST is prime time. If we use our Power of Quitting techniques we’ll usually be done on average in an hour or less. Sometimes it doesn’t work that way and it goes over. In the afternoon? 1:50pm EST – 3:40pm EST and that is it. Forget the midday. Forget the afternoon if you don’t need it.

What about Stock Trading?

If you are day trading you can typically just use your Power of Quitting techniques and go until completion. You’ll see the activity will follow a similar pattern to what we see in the Index Futures – expect a definitely slowdown in the midday but typically if you are holding some trades through you’ll be able to follow your strategy and wait for activity to resume.

Commodities, Global Index Futures and More?

You are going to find that all of these markets will only be active for 50% or less of their respective trading days. You want to pare every market down to size. You should never have to trade the entire session. Ever.

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