Hello there!
Just curious, how many hours do you usually spend analyzing each chart in forex trading? I’m trying to get a sense of how much time traders generally allocate to chart analysis. Thanks in advance for sharing your insights!
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Very thoughtful question. May I be one of the first to reply? Okay, here it goes:
30 seconds.
Yep. You read that right.
I can tell where I want to enter my next trade within 30 seconds of looking at any chart. Let me explain:
Take a look at this chart of the 5-minute E/U.
You notice I didn’t say IF I were to enter my trade, but where. That’s because I believe that there are trades everywhere on any chart. If that weren’t the case, you would not see any candles, only a straight line going across the chart.
So, what’s going on with this chart? Anyone who has been trading for more than a week can see the same thing I am here. The formation of the downward-sloping H&S pattern is being completed on the right side. As the right shoulder is being formed, it’s creating a tight trading range. In other words, both the bears and bulls can make money in this environment. I also know that a scalp profit is safer to take here than a 1:2 swing. So, I enter with a sell limit order a few pips above where it is now and place my stop above the left shoulder (very safe). I’m hoping for a 1:1 RR scalp to just above the low of the day (LOD).
That’s it. Quick and easy. I didn’t need to spend countless hours learning Elliott Wave Theory. Nor did I have to consult the 1-hour,4-hour, or daily charts or look at some silly “heat map.” Notice there are no stochastics, fib scales, or even moving averages (which wouldn’t work here, anyway).
I"ve known so many traders in the past (especially pro traders) who become paralyzed by their own analysis. They’ll spend countless hours doing top-down analysis, Elliott Wave Analysis, and drawing endless lines on their charts. And these are the price-action traders!
I think there are two problems at play here:
Traders like to look at charts.
It’s super fun to try and guess what’s going to happen next and to put all that cool stuff on your charts. You spend endless hours backtesting indicators and strategies and psych tricks and all that. Some people just can’t get enough of it.
We’re told to do it.
We have all these gurus telling us to spend hours on analysis. Why? Because if you just spend the money learning their strategy – with all the indicators, signal bars, and tricks – you’ll be just as good as them and be driving a Maserati in no time.
So now I’m going to tell you my “trick,” free of charge:
- Find support and resistance. You can spot it a mile away.
- Buy at support/sell at resistance (use limit orders)
- For fast-moving trends, use stop orders just beyond the expected BO point (easy)
- Use a wide stop (now, go wider)
- Set a 1:2RR on most trades ( don’t get greedy)
- Expect a 40% win rate (You’ll still make money)
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I spend very little time looking at charts.
For any strategy I’m currently using I list or more usually make a spreadsheet showing what I am looking for in order to trigger a trade using that particular strategy. There might be half a dozen things. I’m usually only trading one strategy, but often (and currently) two, and occasionally three.
I look at the 28 top pair price charts in D1 time-frame only. I would then set entry orders for new trades, usually using the major pairs, then minors, then Australasian.
Doesn’t take long.
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Because my method involves adjusting my stop loss to lock in profits I need to monitor the charts constantly.
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I understand your wish to get the most from each trade. I hate getting out of a long when price has already fallen more than an ATR value. But to make your time worthwhile you must have some sort of guidelines to follow when deciding where to place your stop?
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this is one of those “i know you weren’t asking me, but …” posts!
(for me) it’s not so much about where to place my stop, initially, but when/where to trail it manually, which demands some attention (when i have an open position)
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I spend one hour market chart analysis and sometimes I analyze for the day long.
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I know chart analysis is important so I spend a major portion of my total trading time in chart analysis.
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To be honest I analyze charts in less than minutes and nearly all the time it was OK 
.
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@CallahanSinclair Great question! In the beginning I spent HOURS analyzing charts. Literally, I couldn’t sleep. I analyzed mobile charts, desktop charts, watched others analyzing charts; I was obsessed BUT it paid off. Starting off I 100% believe you should analyze charts to see how markets move and how you understand them. Then when you’re comfortable with yourself, process and strategy, only get in the charts as needed. You’ll want to avoid paralysis analysis.
Current day, I spend anywhere from 15 min - 1 hour analyzing charts a day. The time I spend depends on the following:
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What quarter, month, week, day or season we’re in - right now a holiday in the USA is coming and the pairs I watch aren’t within my parameters, or the move has already been made and I can’t enter.
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If I’m in trades, looking to exit a trade or I want to enter a trade - If I’m in a trade, I just need to manage risk/profit so it takes less time analyzing. If I’m looking to exit it’s similar to managing risk/profit so doesn’t take much time. If I’m looking to enter, I map out my trade and throw in “what ifs” so it takes longer to analyze.
I hope this helps on your journey to mastery or just helps you get insight on others if you’ve already mastered trading!
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I could say the same thing about my early years in trading. Charts were my day.
But then I realised that there are only two strategies from charts - buy because price has been rising, or buy because price has been falling. After that, you just need to select what your entry trigger looks like on the chart and how to balance it with a stop-loss level.
Sometimes there’s an extra consideration for a bit of varierty, like -
How can I get short on the JPY? or How can I get long on the CAD?
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Less than 1 minute per chart.
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It was very perfect and I really thought at first glance, how is it possible in 30 seconds?
And do all of your analyses result in profit, and do you profit from them?
This is very good, so you can earn a good profit and have good money every month. 
This is without a doubt one of the better posts I have seen on this site.
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and it’s very nice to share your ideas about it. And it will be well worth it.
For the past 8 days I had a 12 trade win streak before it got snapped. All analyses will not result in a winning trade.
Not much time actually. Chart analysis take about 30% of the whole trading time for me. I spend more time on searching the news, analyzing the overall situation on the market and particular assets I am used to trade.
However, the same can’t be stated about scalpers for instance, cuz it seems to me they spend almost 80% of time analyzing the chart, while the rest time is spent on opening multitude of positions daily. I may be wrong, cause I ain’t really savvy in scalping.
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I completely agree with this sentence because it happened to me as well.