Time-Based Trading Strategy Tips – Think Outside the Square


Welcome to Trading Strategy Guides! We’re thrilled to have you here and hope to be your go-to source for trading strategy education. Today, we’re excited to share with you some tips on improving time-based trading strategies.

Before we begin, we want to thank you for visiting Trading Strategy Guides! If this is your first time, welcome! We truly desire to help traders become more successful. If you are looking for anything in particular, you can always check out the Trading Strategy Guides Blog.

Newbies to trading should head on over to read Financial Markets for Beginners. You’ll find out everything you ever wanted to know about trading for beginners.

Lastly, if you are interested in becoming a professional trader, you may want to go back and read our Proprietary Trading Beginners Guide, where you’ll learn a ton of information about how prop firms and prop trading work.

If you find that you’re ready to begin the journey to become a prop trader, we have our own prop firm, Global Prop Trader, that has some of the best payouts in the business.

Now that we got that out of the way, let’s get started with Time-Base Trading Strategies!

Introduction — Time-Based Trading Strategies

As traders, we are generally trying to develop trading systems based on patterns we see in price action or in momentum or other indicators. But, what if we took “time” into account as well? Here are a few time-based trading strategy ideas to consider while you’re pondering the markets and how you can profit from them.

But first, you may be thinking, “What is a time-based trading strategy? Is it like day trading? Or Swing Trading?”.

Glad you asked! Because I’m going to answer those questions right. . . NOW!

What Are Time-Based Trading Strategies?

Time-based trading strategies are approaches to trading that primarily focus on specific time intervals or patterns within the trading day. Instead of relying solely on traditional indicators or price action analysis, these strategies incorporate the element of time as a key factor in decision-making.

Time-based trading strategies involve observing and analyzing price movements, market behavior, and trading patterns that occur consistently during certain times or time intervals. Traders study the historical price data and identify recurring patterns or trends that align with specific timeframes. These strategies aim to capitalize on the predictability of price movements during certain times of the day.

Just like every other strategy, time-based trading strategies should be complemented by proper risk management techniques and other fundamental or technical analysis tools.

Traders should combine their observations of time-based patterns with a comprehensive trading plan that includes proper risk assessment, position sizing, and ongoing market analysis to increase the probability of success.

Understanding The Competitive Landscape Of Trading

Time Based Trading Strategy - Competitive Landscape

All traders are looking for that edge. Regardless of what all the hyped-up websites say, Forex trading is not an easy game. As retail traders, we’re competing against the best minds, most experienced, and skilled traders in the world. If you looked at it logically, they hold all the cards, they have a big-brother view of what’s going on in the markets every minute of the day.

Does this mean we don’t stand a chance? Not at all – we just need to be a little bit creative sometimes with our trading systems, and we can beat them at this game. 

The majority of traders build or purchase trading strategies that are based on price action and other indicators. A trend-following strategy often uses the cross-over of moving averages to indicate a signal to enter a trade. A break-out system is usually based on price breaking through a trend line.

What if we ignored trend lines, moving averages, RSI, MACD, and any other indicator with which we pollute our charts?

What if we solely looked for patterns in time, and we built trading strategies based on our findings?

Exploring New Ideas With Your Time-Based Strategy

Time-Based Trading Strategies - Think Outside The Box

Here are a few ideas for you to start with, but feel free to develop your own ideas and blaze your own trail.

  1. Analyzing the Opening Minutes:
    • By observing the initial minutes of a trading session, such as the first 10 to 15 minutes of the New York session, we can look for consistent patterns. Do prices tend to move in the same direction if there is an early push, or do they reverse after a false push? Through careful study and documentation, we can identify recurring patterns that enable the development of profitable strategies.
  2. Last 5 Minutes of an Hour:
    • Many trading strategies rely on the closing of a bar, often an hourly bar, to signal an entry. However, it is worth exploring the price movements during the last 5 minutes of an hour. By zooming into a 5-minute chart and analyzing price action within this time frame, we may uncover patterns that can enhance our trading decisions.
  3. Time-Scaled Trend Trading:
    • When trading within an uptrend and aiming to buy at price dips, considering the timescale becomes valuable. By counting the number of bars between wave bottoms and calculating an average, we can determine optimal entry points. Aligning the timing consistency with the identified wave bottoms can improve our precision in timing our trades.
  4. Session-to-Session Price Flow:
    • Examining how price action transitions between trading sessions, such as from the London session to the New York session, can offer valuable insights. Understanding whether price movements continue or reverse between sessions can inform our trading strategies.

These are a just few time-based trading ideas for you to ponder while developing profitable trading strategies. I’m not saying to throw away all your chart indicators, but just be aware that you could greatly improve the probabilities of profitable trades by taking “time” into account as well.

Conclusion — Time-Based Trading Strategies

While chart indicators remain essential tools for traders, incorporating time-based analysis can significantly enhance our trading approach. By exploring patterns in time intervals and considering the timing of price movements, we gain a fresh perspective on the forex market.

Remember, the key is to develop and refine strategies that align with these time-based insights, increasing our chances of success in the competitive trading landscape.

Thanks for reading Time-Based Trading Strategies, if you liked this article, have any questions, or just want to say “Hey”, please leave a comment below.

See you in the next article!

Up Next:

Did you love this article and find yourself craving more time-frame trading content? Then you’ll love the next one! Multiple Time Frame Analysis is all about mastering the study of multiple time frames in your time-based trading strategy.

Further Reading

If you liked this article and want more, then feel free to browse our other time-frame trading strategies.

FAQ’s

What is the difference between a Time-Based Trading Strategy, and Swing Trading?

Swing trading can incorporate time-based elements, but is not solely defined as a time-based trading strategy.

Swing trading focuses on capturing shorter-term price movements within a larger trend. Traders typically hold their positions for a few days to a few weeks, aiming to profit from price swings that occur within this timeframe. While swing traders may consider specific times of the day for entry and exit points, their strategy is not solely dependent on time-based patterns.

What is the difference between a Time-Based Trading Strategy, and Day Trading?

Day trading can incorporate time-based elements, but is not solely defined as a time-based trading strategy.

Day traders may utilize time-based factors such as studying market opening and closing hours, monitoring specific time intervals during the trading session, or identifying patterns that tend to occur at certain times. However, day trading involves a range of strategies and techniques beyond time-based considerations.

How useful was this post?

Click on a star to rate it!

Average rating 4 / 5. Vote count: 3

No votes so far! Be the first to rate this post.

As you found this post useful...

Follow us on social media!

We are sorry that this post was not useful for you!

Let us improve this post!

Tell us how we can improve this post?

2 Comments

Leave a Reply

Your email address will not be published. Required fields are marked *

Disclaimer: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. No information or opinion contained on this site should be taken as a solicitation or offer to buy or sell any currency, equity or other financial instruments or services. Past performance is no indication or guarantee of future performance.

x  Powerful Protection for WordPress, from Shield Security
This Site Is Protected By
Shield Security