Market timing

[Ravique]

Every point on the chart has two coordinates. Price and time (date ). Most of the traders and indicators focus on price. I have read some articles about traders who state that time is as important as the price. Gann , according to the articles ( we will not be discussing all the speculation around this name and his method ) stated , that time is more important then the price. So , a question follows:

Do any of you have any articles, or links to threads , about market timing ?
Have any of you tried exploring time and price, or time patterns, or any other subject connected with time and currency markets?
In general, what do you think about the importance of timing?

Do not hasitate to express your thoughts .

[scorpion]

Technical indicators do somehow use the Time axis in its calculation. The values of indicators are greatly affected by time. Although indicators don't read time as ##:## AM, it does use the period of time in its calculation. Period of time itself involves two points on the time axis. We instruct moving average to smoothen the prices to fit your time period. We instruct RSI, MACD, CCI and such to draw the their values from both Price and Time series.

What those indicators miss are the date and exact time read as ##:##:##. I've been exploring around these two variables (date and exact time). It's a motive that I created the Economic Calendar. Price simply doesn't move randomly during the days; it moves at the right timing. For example, on the first Friday of every month at 8:30 ET (13:30 GMT), all currency pairs will go rage violently, possibly 100 pips to one direction. I can employ various strategies to profit from this pattern. Gann's Fibo Retracement is one of my favorites.

In brief, timing is basically very important. Price is just one side of data. With both timing and price data, you'll leverage the profitability of your system.

I recommend "The Secrets of Economic Indicators" book by Bernard Baumohl. The very minute you read it, you'll see how and when price fluctuates at what volatility. You'll unlock the secrets to timing profitable trades.

P.S. I apply my strategy on timing to the Predictor in Economic Calendar.

[gazuz]

Scorpion,

the problem i found with the trading on timing is that most brokers during news hour will either not fill the request at the right time or make the spread huge. If both of these things didnt happen I could make a very hefty amount of money as well, but unfornately brokers won't make it happen..

I noticed also Ravique you mentioned that price wasn't important but I think what you mean is that you need to see the time before the price, usually prices fluctuations dont happen so randomly and are according to times (such as market open, news releases, etc).

If we want to trade with time we need to trade outside of news releases (because of increased spread and order fill) or just find a broker with fixed spread that will fill the order instantaneously!

[scorpion]

Gaz, we certainly can't enter when the news is being released. Like you said brokers won't fulfill the order. But we certainly can trade a few hours after the news or 30 minutes before the news release. By taking the fact that price won't go in one direction forever, it has to bounce back, I believe we can make a system to scalp around 30 pips when price is reversing.

Trading before the news involves in predicting the market behavior. If we understand how market react to a piece of news, we will be able to foresee the direction of price. We don't need to be 100% correct on all news, but only 60% correct predictions. If you win 6 out of 10 trades, we'll make profit. It shouldn't be difficult to have the Predictor performing at 60% accuracy, because we have economic data and consensus forecasts made by central banks and great economists at our disposal. They've done all the predictions at around 75% accuracy; therefore, we'll only need to decipher the consensus.

[gazuz]

Thats very true, but during news is also a hard tast because we usually reach our take profit/stop loss during the news change and so the spread will be crazy OR the broker wont fill the order.

By that I mean lets put a 30pip TP and 30pip SL. If the price goes up it may go up 30 pips or 50 pips or 100 pips, we dont know when the broker will fill the order of the TP, it may only fill it after a pullback in the price resulting in a smaller or higher gain or even net a loss. Same thing happens to SL it may lose more than we expect it etc. It seems like its out of our control, if we mess up on the prediction it may be hard to regain from the loss.

In other words, the news in the market makes it almost impossible to control our exit strategy and target profit. We usually cant predict the magnitude of the movement precisely enough... Unless I'm thinking about this the wrong way I don't think its a smart idea to trade the news