How to determine the best hour to trade for scalpers and swing traders?

 

We all "hear" what the best hours are to trade but how do we validate the best hours to trade?  There are scalpers and there are swing traders.  Scalpers may want to target different market conditions, perhaps periods where candles are long enough to profit and swing traders / intraday traders may want to identify the best hour for long hold entries. 

As coders and analysts, we must be able to prove what the best hour is to trade based on current market conditions, calculated over a period of time.  

Here is my ways to analyze price data for an instrument.


Indicators /Skills required: 

  • ATR
  • ZigZag
  • Excel pivot tables


For scalpers, you might want to pay attention to the ATR script.  The idea is for me, as a scalper, to target hours that offer the highest trading range for my targeted instrument. 


For Swing/Intraday traders you might want to pay attention to ZigZag.  The idea is to target the hour that has the highest ATR value within the swing low to swing high or vice versa, so that you can feel comfortable staying in the positoin.



STEP 1

To identify the best hour to scalp I run the ATR Statistics.mq4 script on ANY time period to gather the following columns in a csv file, over a period of N Bars for the following time periods (M1,5,15,30,H1)  

  • Symbol
  • ID
  • Period
  • Time
  • ATR
  • Year
  • Month
  • Hour
  • Minute
  • Day of week
  • Day of Year
  • Pips
This script calculates the average trading range for every single bar.  The idea is for me, as a scalper, to target hours that offer the highest trading range for my targeted instrument. 


STEP 2

Open the spreadsheet and create a pivot table on the values.  See the attached Excel sheet. The fields in yellow were derived from the exported data. 


Step  3

Analyze the output and target your strategy.  


End result will look something like 






For scalpers, run the ZigZagStats.mq4  script.  Repeat the same process above.

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