I remember reading somewhere (maybe Youtube) that in the US only 2-3% of trades were left open over weekends (may have been even overnight). The article was about scalping and the figure of trades left open basically proved that 95%+ of the trades where scalping.
There is a verified financial daily report (publicly available) which recorded all trades placed every 24 hours in the US that was used to support the story. Someone out there may know more about it.
Thanks WTJ,
Your observations are well worth noting; but wouldn’t all the variations during the day that you mention be irrelevant when trading dailies as daily trades could easily span two or more weeks, covering all of those market conditions?
BTW, I learned to talk Australian in the Outback restaurant here; but one question I have: Why don’t Outbacks call their bathrooms Outhouses to match their Outback name instead of Blokes and Janes?
You are right, that is why I am also trying to trade the longer time frames… the noise beneath the 1 hour charts is well…deafening. I have been scalping for the last 3 months with reasonable results. Trying to change my mindset to higher time frame trades I am struggling with… I have to learn to leave the trade alone…
“Blokes & Janes” must have been Queensland “Cane Toad County” normally “Gents and Shelias”
This advice is about trading in times of best market liquidity where you will get lowest spreads (what is essential for scalping). You can also trade other trading sessions (if we talk about forex) but its not better option for intraday trader. As an alternative you can switch to position trading where you place trades based on medium-term forecast and hold them for more than one day. This is even beneficial in terms of reducing your trading costs but expose you to adverse impact from volatility
Hi Clint,
You wrote, “during the week, the ‘close’ of the retail trading day (and the simultaneous start of a new trading day) occurs at a time arbitrarily chosen by each retail broker. At this arbitrarily-chosen time, the broker’s daily candles will close, and the next day’s candles will open.”
The New York trading day is typically listed as opening at 8AM Eastern and closing at 5PM. Please explain how this reconciles with your statement that the close of a broker’s retail day coincides with the opening of the new trading day. Is it that electronic trading by banks, etc., goes on for the full 24 hours and the retail day is 8 to 5?
Thanks
Hello, Norm
You’re confusing:
B[/B] trading session times (daily periods of high-volume activity, normally lasting 8 or 9 hours) with
B[/B] the time at which a broker divides one 24-hour day from the next.
Both (1) and (2) are arbitrarily specified.
Trading goes on 24 hours per day, 5 days per week in all forex markets, including New York, which I will use in the following example, because it’s the market you referred to.
B[/B] Most of the foreign exchange trading transacted in New York occurs between early morning and early evening. Bankers don’t punch a time-clock. Some might arrive at the trading desk before 6 in the morning, and leave the office after 8 in the evening. But, the majority of daily trading volume occurs between 8am and 5pm, a time period which brackets (a) the normal business day in New York, and (b) the session times of the U.S. stock exchanges and commodity exchanges.
[I]So, 8am to 5pm represents an arbitrarily-chosen time period for designating the New York Session,[/I] and this arbitrarily-chosen time period is as good as any. In my studies, I have estimated that about 83% of daily forex trading volume occurs during this 9-hour period, and only 17% of daily volume occurs during the other 15 hours of the 24-hour trading day.
B[/B] Retail forex brokers must decide for themselves where (on the clock) to draw the line between one 24-hour day and the next. Choices might include midnight, local time, to coincide with the ordinary calendar day. Or, midnight GMT, to “internationalize” the designation. Or, 5pm New York time, for reasons which I have explained in many previous posts.
[I]In the forex industry, 5pm New York time is becoming the accepted standard time [/I]at which “Monday” becomes “Tuesday”, and then “Tuesday” become “Wednesday”, and so forth.
Once a broker has chosen this time as the end of one trading day and start of the next trading day, then obviously this time becomes the closing/opening time for daily candles on that broker’s charts.
And, in order to synchronize the lower-time-frame charts with the daily charts, [I]the first candle each trading day[/I] on the H2, H3, H4, H6 and H12 charts must also open at 5pm New York time. The H1 chart, and the minute-charts, are not affected by the choice of time for the start of each trading day; likewise, weekly and monthly charts are not affected.
I hope this clears up the confusion.
Cheers
.
Thank you, Clint,
Very clear. I must say, in all my hundreds of hours of researching Forex, I do not recall that the distinction you made between the 24-hour turnover and trading session times has ever been addressed.
Nuff said.
Thanks,
Norm