This week’s question comes from Henrico, who asks:
What’s the best day to analyze my Forex charts?
Finding the right time to analyze your charts is essential.
It may not seem like a big deal, but it can mean the difference between finding profitable setups and ending the week with a loss of capital.
When I started using technical analysis in 2002, I had no routine. I would draw levels here and there whenever I had the time and hope for the best.
Today, I have a scheduled block of time for performing my chart analysis.
Doing so enables me to mark up my charts as necessary, free from distraction. More importantly, it’s a way for me to draw levels ahead of time to allow the market to come to me.
It also provides a full week of activity which helps me determine the best approach for the upcoming week.
If you feel like you’re constantly chasing the market, this post is for you. I’m going to let you in on some trade secrets, including when I perform my analysis and how it helps me stay patient once the trading week begins.
Ready to do this? Let’s go.
The Weekend 'Forex' Warrior
My weekends aren’t exactly free these days. Between running this website and the member’s community, I don’t get much downtime.
Still, weekends are my best bet for carving out some chart time.
While it helps that the retail market is closed over the weekend, the real advantage for me is the respite from a busy schedule.
I wake up every day at 5:30 am, which gives me a couple of hours of study time before the missus is up. Even the dogs sleep in on weekends, so it’s just me and my charts.
I usually conduct my analysis each Saturday morning, about 24 hours before I release Sunday’s weekly forecast.
Performing my analysis before the market opens gives me the advantage of taking a ‘wait and see’ approach. I simply set my levels and then wait for the market to establish a favorable opportunity to buy or sell.
One mistake I see many traders make is that they have no set time to analyze the market. This leaves them chasing setups left and right during the week.
It’s far better to let the market come to you. It helps you maintain an objective stance until something worthwhile comes along.
Market Volume and Weekly Signals
One reason I favor the daily time frame above the 1-hour and even 4-hour charts is due to the increased volume.
Quite simply, there’s more trading volume in a 24 hours period than any 1-hour or 4-hour block; as long as you’re comparing the same currency pair, of course.
Why does volume matter? After all, isn’t it just a mixed back of buy and sell orders?
Not when you understand that the Forex market is merely a voting system.
Think about it. Your decision to either buy or sell the EURUSD comes down to whether or not you believe the pair is overvalued or undervalued. In other words, whether you think it will move higher or lower.
It doesn’t matter how you arrive at that conclusion. You may utilize simple price action like myself, or use fundamentals to evaluate the Euro and U.S. dollar collectively.
Either way, the moment you buy or sell the EURUSD you’re casting your vote. The more votes there are in a specified period, the more reliable any resulting signal is likely to be.
Just like a daily candle contains more volume than a 4-hour period, a weekly candle has more volume than a daily one.
So, by performing my analysis over the weekend, I have the advantage of seeing those ‘votes’ for the entire week.
That allows me to pick out patterns like the EURNZD weekly bearish pin bar below.
I mentioned this particular formation in last week’s Q&A. A 50% entry of that pin bar has traders in profit by 200 pips at the time of this writing. And the pair is still overextended, which means additional downside is likely.
For many, the next logical question becomes – why not just trade the weekly time frame then?
Why not, indeed.
It’s a perfectly logical thought process when you consider the volume advantage it offers. In fact, some of my members use the weekly charts to find 90% of their setups.
The downside is that your average trade will take weeks if not months to play out. But if that isn’t a problem for you, trading from the weekly time frame may be one viable (and profitable) approach to consider.
Even if you don’t use weekly signals like the one above, performing your analysis at the end of each week will give you a distinct advantage over those who don’t.
Never Stop Challenging Your Analysis
As traders, our work is never done. Once you’ve performed your weekend analysis, it’s important to continue to monitor your levels throughout the week.
The great thing about price action is that we get to see whether or not the market respects our levels.
If it does, great. We can watch for buy and sell signals from the area depending on whether we’re bullish or bearish that particular market.
If not, it might be time to either remove the level or adjust it as necessary.
It’s an ongoing process of drawing and tweaking levels to determine the best placement possible.
However, it’s important not to go overboard. While it can be advantageous to adjust levels as the price action unfolds, it can be all too easy to ‘form fit’ your levels.
This happens when you adjust levels to benefit a trade idea on your watch list, rather than staying objective with your analysis.
So if you tweak a support or resistance level, just be sure it’s justified by the price action on the chart. Otherwise, you’re better off leaving it alone.
What Fits Your Schedule?
Not everyone has weekends off. Heck, even I don’t fully get them off, given that I continue working on the website over the weekend.
Nonetheless, it’s my best chance at carving out some chart time.
If you’re someone who works weekends or has other obligations during that time, you will need to find an alternative.
One reason I choose to do my chart analysis on weekends is because the retail market is closed. That means I don’t have to concern myself with where the Euro is or what the U.S. dollar is doing.
However, the greatest advantage for me is the downtime. The ability to sit down at my charts for 30 to 60 minutes with no distractions is priceless, not to mention rare.
You should strive for the same. If that means performing your analysis on Monday, so be it.
By doing your analysis at a set time each week, you’ll be less likely to chase the market when a new week begins. Having your levels in place when the market opens means all you have to do is sit back and wait for setups to come to you.
That’s a far less stressful way of trading Forex; and less stress means more profit.
Choosing the right time to analyze your charts is vital to your success. Do it when you’re in a rush or not feeling 100% and you might miss something you’ll wish you hadn’t.
I prefer doing my analysis over the weekend when the retail market is closed. It’s a time when I’m not as busy, which allows me to commit all of my energy to the task at hand.
I’m also not concerned with the market’s movement over the weekend. For 48 hours the market is at a standstill, which is great for analyzing Forex price action.
Being able to analyze a full week’s worth of volume is also priceless. Those buy and sell orders, or ‘votes’, give you the insight you just can’t get with any other time frame.
However, it’s important to find a time that fits your schedule. You may not have downtime on the weekends like I do. If that’s the case, you’ll want to find a time during the week that allows for 30 to 60 minutes of analysis.
You will also want to monitor your levels throughout the week. Be sure to check on your charts at least once a day to evaluate how your levels are holding up.
If you need to make changes to your levels, that’s okay. The market is fluid, so why have a rigid approach to drawing levels and patterns? Just be sure you don’t overdo it.
Your Turn: Ask Justin Anything
I’d love for this new weekly Q&A to be successful and provide an invaluable repository of answers to common Forex questions.
To do that, I need your help.
Here’s what you can do to get involved and have your question answered in next week’s post:
- Ask questions. Post them in the comments below or Tweet them to me @JustinBennettFX
- Help me answer questions. If I missed something or if you have something to add, don’t hesitate to leave a comment below.
THE BROKER PLATFORM IS CLOSED OVER THE WEEKEND. HOW WILL YOU LOOK AT THE CHART ON SATURDAY,ANY IDEA?
Donwload another broker platform. There are tons of brokers who use MT4 and you can see charts over the weekend.
What broker do you use? Use Axitrader or some other broker platform that keeps their platforms open even though the market is closed. Create a demo account and analyse the chart
Wondering if you could do a follow up to this showing examples of how you analyse and draw up levels?
A good article.
One does analysis based on historical data that tell significant stories and provide significant information which are explained by Justin in his webinar about analyzing trends which provide important clues to which the market is heading.
Hi Vic, this is explained by Justin in his webinars which you must definitely attend. There is also a very important book (encylopedia!) that elaborates in very great detail about using trends to find signals for trading: Thomas N. Bulkowski, Encyclopeida of Chart Patterns Second Edition, John Wiley & Sons, Inc., Hoboen, New Jersey. Available in Kindle format at USD72.00. It literally explains and provide information on how to use 100’s of chart patterns to enable you to make the right decisions (“votes’).
Use tradingview.com my friend
Thnnks sir give us tips for how to find right place for buy and sell
Feel free to browse the site; it’s all here.
You are so right. I missed out on a lot of trades and always find myself chasing the market. Really need to work out a schedule. Thanks, Justin.
You’re welcome. Yes, it’s best to mark up your charts ahead of time and let the market come to you. Aim to take no more than two or three trades a week, and I can all but guarantee that your trading will improve. Cheers.
Thanks for the tip. I used to study the weekly charts on Sundays. Will definitely start again. Cheers
You’re welcome. Glad you found it helpful.
Hey Justin! Useful and necessary article! Correctly you said about the routine, this is the work that must be done. I watch 25 pairs and from them I choose 8-10 pairs, which go well through the levels. You correctly say – it relieves stress! Thank you for the good and necessary work for people!
Thanks our great mentor pls I am new in the forex but I just discovered this your sight pls would like you with your good work help to grow on this areas eg how to draw lines,how to know or when to enter buy or sell for days now I been on loss. Thanks
Welcome to the site. Feel free to browse the lessons and articles. I’ve written about both of those topics before.
Watch the webinar. It will be of great help.
Can daily price action work well on H1 and M30 timeframes? For intraday trading?
And also nfp friday has huge impacts on the market can you please explain how to position yourself for nfp or any other high impact news?
Price action only describes the movement. Whether or not it works on those time frames depends on many factors. That said, I’ve found price action signals to work the best on the daily and weekly time frames.
Justin you have said it all. Weekend is the best time for analysis. You are the reason I am improving in fx. More power to your elbow.
That’s great to hear. Let me know if you have questions.
Thanks for sharing such a wonderful article on trading. Could you please give an idea about risk parameters. I mean as you strongly advise using larger time frames the risk is also very high on these timeframes in the shape of stop-loss. I would be pleased to hear from you
Shiraz, feel free to browse the site or use the search box located in the right sidebar.
The higher time frames do not require higher risk. It comes down to your position size. A 20 pip stop loss can carry the same risk as a 200 pip stop loss. See the calculator at the link below to learn how to calculate your position size.
i just want to thank you very much for all the helpful information
you are teaching us. it is keeping on truck and doing less and less mistakes
and i thank you again.
You’re welcome, Meir. It’s my pleasure.
Very best analist mr. Justine,…thank you very much
Anytime, Moh. Cheers.
another great article…thanks Justin. I have also found that weekend analysis was best for me and my weekend forecast are more accurate than midweek forecast. But my problem is my levels, especially the trendlines on daily timeframe are often not respected by weekly timeframe candles. Do you have similar problems? If yes how do you handle it?
Thanks, Deos. It’s a known issue with MT4 (and some other platforms). I don’t use many trend lines so it isn’t much of an issue for me.
thanks a lot
Great post as always. Will like to read more on the mean reversion tool and how to read it properly. Last week post on False breakouts and Pin Bars just changed my trading outlook.
Pleased to hear that, Ferdinand. Here’s the post on mean reversion:
Hi Jb,great article as always,the nicest part about this one is that I’ve been doing it for a while now and during the week I just watch whether the market is respecting my Levels or not whether to continue with that trade or adjust as price action unfolds,doing this helps a lot you don’t chase the market but you are always one step ahead
I agree with you 101% weekends are great days to analyze market especially when you are a daily and weekly trade. Thanks Justin
Hi Justin,Knowing very well you like to trade off daily charts what time frame should i concentrate to trade intraday where i like to close my trades at the end of the day. Should i do my trend analysis on 1 hour charts and enter on 10 or 15 min charts?
Hi Justin, congrats for your pots..I always follow you… I have a question about fundamentals. I know you use just price action setups but what if you found that a particular price action setups is in play contrasting the interest rate funds? For example if Gbp have a bigger interest rate or other fundamentals than Yen do you really want to sell GbpJpy? Cheers!
Thanks. This is great.
Hi Justin, great article as usual. Just wana know more abt ur daily routine. You mentioned you get some study time in the morning. But what do u actually study? I usually review my trades n everytime I discover something new. But it’s a very long and slow process. I hope to get a more structured approach.
Stick with it. It is long and slow but that is a good thing. It gives you much time to analyse a market better.
What is the best time frame to draw Fibonacci retracement? How far should I go back between the top and bottom? Is 1 year time frame sufficient?
Justin I have been following your tips for months now and am very happy with the results I have had. I live in Thailand and am having trouble finding the close of various pairs at closing time of US session can you tell me the best way to find this.
I find it amazing that when the US news hit this morning, the USDJPY made a large move, and the other currencies hardly moved at all. What is your take on that?
What day and what time is the best trading time in the Philippine Sir?
What day and what time is the best trading time in the Bangladesh Sir?
Justin what’s the significance of back testing?
How to do I grow my account of $140 trading on daily charts, and what leverage and lot size can I use to make it grow.
That’s an incredibly open-ended question. It’s also something you need to determine through experimentation as there is no one-size-fits-all approach to the markets.
Feel free to browse the site and come back with any specific questions.