Trading Success = Clock Watching
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.
Jay Norris is the author of Mastering the Currency Market, McGraw-Hill, 2009, and a trading instructor at Trading University in Chicago. To sign up for free memebrship at Trading-U.com to hear of upcoming educational initiatives go to: Registration
DISCLAIMER: Forex (off-exchange foreign currency futures and options or FX) trading involves substantial risk of loss and is not suitable for every investor. Risks include the potential that changing political/economic conditions may substantially affect the price/liquidity of a currency. Investors may lose all or more than their original investments.
I agree with you Jay. Also , have to add from my expriance, the session times: starting from Sydney, going into Tokyo, [Shanghai – SSI, HSI, lately as a movers in middle of the Asia Session, Moscow, EU, London, Canada-North American FX market, Ny open, NYSE, London CLose.. Big lunch.. ect..
The Timing.. folowing the Timing and market opening/closing we can experiance very often a Momentum shift, sometimes 180 loop.
Thanks Jay.. (very good Read)
There is Zurich (Europe)@2am then London @3am, Chicago @6am etc…those time are also important but I wonder what is usually most active time during Asia and London session…? I am trying to trade in those two sessions and avoid NY unless there is very good opportunity to trade in my opinion…
Thank you for bringing this subject…
i like your realistic approach to the market,how cai be receiving your materials?
David,
Our courses will be available very shortly. We’re proud to say that they will be not only affordable, but in our humble opinion much better than most everything else on the market today. We can say that with confidence because we have researched much of what is out there.
Thanks Mr Piters!