The Best time to Check the Currency and Stock Markets
Lack of patience is the biggest problem of the novice traders which is indeed a problem that comes from greed. They want to make money within the shortest possible time, so that they don’t wait for the trade setups to mature and form and they enter the markets too early.
I have seen this a lot that many novice traders enter the markets when they see that the daily or weekly candlestick has formed a strong body, and so a strong engulfing patterns while it is still forming and hasn’t closed yet. They enter the market but then the price changes the direction and a strong body changes to a long shadow which means the position that the trader has taken is absolutely wrong.
The best time to check the daily chart and daily candlestick is when they are closed which is usually at 5pm EST on most of the trading platforms. You can check it even one hour before because the price usually doesn’t change that much in the last one or two hours. However, everything is possible and the best thing is waiting for the candlesticks to close first.
The best time to check the weekly chart and candlestick is on Friday afternoon when the market is closed, and so the weekly candlestick is matured, or, on weekend and before the market opens. You have a lot of time to check the weekly candlesticks of all the securities you follow and decided whether you want to enter at the market open or not.
And the best time to check the monthly candlestick is on the last or first day of the month.
If you are a day trader which is something that you’d better to avoid, you have to wait for the candlesticks to close and then decide whether a trade setup is formed or not. You cannot analyze a candlestick while it is still forming.
Above all, you should always wait for the trade setups to mature no matter what trading system you follow.
For example, if you are waiting for a resistance breakout to buy, you have to wait for the price to close above the resistance line on that special time frame that you are following. If you are waiting for a resistance breakout on the daily chart, then you have to wait for one of the daily candlesticks to close above the resistance line first. As long as the candlesticks are closing below the resistance line, your trade setup hasn’t formed.
The resistance line can’t be considered broken when a candlestick has moved above it but is still forming and hasn’t closed. Chances are it goes down and closes below the resistance line even few minutes before the candlestick close.
To prevent yourself from entering the markets before the trade setups form, you can check the charts only after the candlestick close and for example you shouldn’t check the daily chart at 11am EST while the current daily candlestick is going up and down and is still forming. A big candlestick body at 11am doesn’t mean anything yet, because it is possible that it changes to a shadow below the resistance line.
For example two days ago (see this post), the 2017.01.03 daily candlestick went above the 1.0327 resistance level. It could be considered as a long trade setup if it would close above the 1.0327 resistance level, but it didn’t. It went down and its strong body changed to a long upper shadow, and it closed below the 1.0327 resistance level, which means those who have been wait for a long trade setup to go long with USD/CHF still had to wait.
Good luck 🙂