Why do serious traders often choose the New York time frame?

Learning how to trade in the market is a difficult experience. Maybe you have read a lot of articles on trading methods, you have followed a lot of articles on different forex forums. And you're practicing trading whenever you have time to look at the chart. But, maybe you missed something very important that could make a big difference in your trading skills and the amount of effort you put into it.


To make the right trading decisions based on price action, you need a simple and clear chart, but at the same time need the most people to use it. This will help you pinpoint what the crowd is thinking (since you know a lot of people are looking at the same chart as you).

You might ask, "Aren't all the charts the same?" No, they are not the same. There are huge price differences that brokers are using, especially with the 2 main charts we will discuss below: GMT chart and New York time chart.

New York Time Frame Chart


Not all trading sessions have the same daily trading volume. You probably already know that most of the biggest market volatility takes place when the two overlap sessions are over from 8:00 am to 12:00 EST (around 19:00 to 22:00 Vietnam time. ). After the two-session European-American session, the only trading session that had an impact on the market was the New York session, which ended every day at 5 p.m. (EST) from Monday to Friday.

What we need is to see the closing hours of the New York session. Unfortunately, most brokers use chart types that are based on the standard GMT timeframe. This means that, for each candle opening at 00:00 GMT, a total of six candles are created per week. Chart types based on the GMT timeframe generate a lot of confusion, as the chart daily includes an additional "Sunday" candle that opens on Sunday at 23:00 GMT and closes at 00:00 GMT.

This problem causes the GMT chart to be confused with redundant, unnecessary information (redundant candles). Candlesticks that close on the weekend make us mistaken for a doji, signaling that the market is "hesitant" ... A Doji has a small body and usually means a trend reversal is possible. Especially if they form near the support resistance area, it can cause the trader to misunderstand and enter the wrong order.

The charts are based on the New York time frame, in contrast, there are only 5 total candles per week and no "Sunday" daily candles. With price action Trader, the closing price is a very important factor for a trader to make trading decisions, because PA Trader always relies on the closing price to determine information about the market buying force brought by Japanese candles.

Difference between GMT time chart and New York time chart

Let's look at the difference between the GMT chart and New York Close chart.


As you can see, the New York Times chart has no Sunday candles, the appearance of these candles can be confusing for traders. Notice the small candles marked in red on the left GMT chart.

The GMT chart creates a lot of small body candles and Doji candlesticks because the daily frame of the GMT chart closes 1 hour after the Asian session (1 hour is too short for a single session to fully show the price fluctuations of it). The New York time frame chart, on the other hand, accurately captures the full activity of the New York trading session in one day.


Look at the New York time close chart (left) and the GMT close (right): while the chart on the left shows a bearish pin bar, the chart on the right shows no pattern. Not to mention the small Doji candles on the GMT chart also made the chart have more noise signals than the New York session chart.

Conclude:

Using New York Times chart is not the only way for you to trade successfully. Whether you choose GMT or New York time frame, you still need to grasp the basics of price action, read candles, support resistance ... to understand the market.

But with the advantages of the New York time chart (fewer noise signals, accurate candlestick information ...), you will have many advantages to "read the market" better.