Followers of No Nonsense Forex know we trade the Daily chart, and we use indicators to make our entries.
We also know I personally prefer to trade 20 minutes before the close of the daily candle.
Does this mean you have to?
Episode 23’s question is from Terry
“I’m not always able to trade at the same time as you. Is this bad? And is there anything I need to be aware of if I’m not trading at the same time you are?”
Terry, from Billings Montana
Why I Do It This Way
If you’re reading this blog for the first time, you’ve traveled too far.
You need to understand why we do what we do here.
We trade the Daily time frame, because it’s the most accurate and gives us our time back.
Time is the only luxury.
We use a system of indicators (which for most, are still under construction) to enter our trades.
I trade 20 minutes before the daily candle closes. I do this because I have just about all of the data I need for my indicators to properly tell me what to do.
And if I wait until after the close, spreads go way up for an hour, and I have to wait.
It’s better just to get it done all at one time, and this is the time I choose, and that is why.
You’re Not Me. I’m Not You.
My trading happens at 1:40pm Pacific Standard Time.
As I stated before, I believe there are clear advantages to doing it this way.
Only 20 minutes before the close seems like quite a constraint, but I showed you in the Indicator Basics video, how this is remedied.
So as the question in the beginning states, not everyone can trade during that time.
Don’t get me wrong, from a worldwide perspective, 1:40pm PST is pretty damn friendly.
Middle/Late afternoon in most of the Western Hemisphere.
Right before bedtime in most of Europe and Africa.
Right as most people are waking up in Tokyo and Sydney.
However….
Singapore, Malaysia and India? Sorry friends, this is a big ask. Sleep is important, don’t worry about trading exactly when I do.
And like Terry, some jobs just don’t allow for trading at this time.
This is not the end of the world, trust me, you just need to know a few protocols to have in place, and understand the one big mistake you need to avoid here.
We Might Just Be Able To Fix This Now
Many brokers operate on standard GMT time. This would mean for me, I would trade 2 hours later than usual. If that 2 hours makes a big difference to you, seek out these brokers and you can still trade the daily chart in optimal fashion.
The broker I use for charting, and the demo accounts I show you when we take trades is Oanda. They operate on GMT -2 time, meaning instead of midnight GMT, the candle closed at 10pm GMT.
If trading two hours later would suit you better, check out by blog on IG US. It could make a real difference.
Check and see how your broker does it, or just go your charts and see for yourself.
Those two hours could make a difference, for better or for worse.
The optimal time to trade the daily chart is around 20 minutes before the daily candle closes, whenever that may be according to your broker. Just remember that.
But If You Still Cannot
You’re gonna be fine. Here’s how you approach it.
This is how you approach trading the daily chart, if you are forced to trade after the close of the daily candle.
For these examples, we’re only going to be going long.
If Price Has Not Moved Much Since The Close
Then don’t worry about it. Just make sure you’re not factoring in the little bitty current candle that’s moving right now when it comes to reading your indicators. Again, this was covered in the Indicator Basics video I linked above.
If Price Has Gone Short Since The Previous Close
Well lucky you! You can now enter the trade at a discount.
Don’t be worried that price is going the other way. Trust your system, and if it said “This is a long entry”, then that’s what it is. Don’t try and out-think a system that you have shown is proven to work.
If Price Has Gone Longer Since The Previous Close
Now we need to game-plan here. This is where it gets important.
If this candle was when your long signal on the USD/JPY happened, price has already moved 30 pips!
There are 2 possible routes you can take here. Whichever you choose, stick with it religiously no matter what.
Discipline, discipline, discipline.
1 – Just don’t take the trade
The great part about Forex, and trading 27-28 pairs like we do here at No Nonsense Forex is that if we miss the bus, another one is coming right around the corner.
So just wave good-by, and wait for the next bus. Some trade will give you a sweet discount, some will not have moved at all. You’ll still have plenty of opportunities. And great patience to boot!
2 – Set a limit order where the candle closed.
I use market orders almost all the time. A market order says “just give me the long/short at the price it’s at right now, thank you”.
I don’t believe in price levels, and if I’m trading, my system is giving me a signal right now, so what would I be waiting for?
You however weren’t able to get there near when the candle closed, and now price has ran away from you a bit.
But it can, and often does come right back to where it started.
So you can set a limit order, telling your broker to go long if price retraces to the price it was back when the previous candle closed.
If the order gets triggered, great! You got in at the original price. If it doesn’t by the end of the day, remove the order, and move on.
But Do NOT Do This
The old FOMO trade. Fear Of Missing Out.
Price has ran 20 pips in your direction, and you don’t want to miss out on the trade, so you just enter it right away anyway.
Bad trader!! Bad bad trader!!
“A real killer, you are not”
You created your system to give you the perfect entry, right?
Is entering 20 pips WORSE than where your system told you to enter the “perfect entry”?
No. No it is not.
“It’s only 20 pips” you might say.
“Your discipline is off, and this is going to bite you hard in the ass later on”, I might say.
Let’s say for example, the ATR on the USD/JPY was 70 pips.
So if price moved 70 pips long from when your system gave you the signal, you take half profit off, and move your stop loss to break even, therefore giving you a WINNING TRADE.
Now it has to move 90 pips to give you that win.
It may not do that. It may move 70, but not 90.
And there goes your win.
I can speak on this, because I took FOMO trades all the time.
In the end, the math was not in my favor. I lost more than I won.
Have discipline. Do better.
Conclusion
Not everybody can trade when I do, and I wanted to make sure you knew what to do and what precautions to take if you have to wait a few hours later to trade due to work or location.
These steps are important however. Your bottom line depends on it.
If you cannot trade at the end of the daily close, or during the first half of the Asian Session, I don’t know what to tell you.
Find a way. It’s worth it in the end. You’re at a very big disadvantage if you cannot.
Or, at the very worst, if you absolutely cannot trade in this window, and this is soooo hard for me to type………..trade the 4-hour time frame instead.
There I said it.
Just don’t get mad at me if things don’t work out as well.
— VP