New York Daily Close Charts

Verified Profitable Trader

Today I wanted to cover an important topic that has been widely discussed, but heavily misunderstood. There has been this propagated myth the NY Daily Close Charts are the best time frame charts for trading. The theory goes they offer a true forex 5 day week, instead of the 6 candles from the 00.00 GMT candle open, or the European Open (GMT +3).

The ‘theory’ behind this is the extra 6th candle throws the price action off, and that systems do not perform as well when using the 6 day weekly charts as opposed to the 5 day charts.

But has anyone ever backed this up with statistics? Anyone offered a shred of proof that a pin bar, or inside bar, or and price action strategy would perform worse under the 6 day weekly charts as opposed to the 5 day weekly charts?

No……until today.

I recently ran the stats on one of my price action systems called the sBar, which was not built for any specific time frame – just a price action pattern I noticed that often led to an excellent trading setup. It is based on the underlying order flow behind the price action which usually suggests a likely with trend break.

For 2013 – we ran the stats again being a new year, and the results were interesting when you compared the UK GMT 00.00 daily candle open with the NY Daily Candle Close (5pm EST time). Here are those stats below;

FXCM UK 6 Daily Candle Close 00.00 GMT Time
-9 Pairs that made the cut for min. performance profitability
-Across 4 Time Frames (Daily, 4hr, 1hr, 30m)
-22 Profitable Possibilities (i.e. AUDJPY daily = 1 possibility, 1hr = 1 possibility, 30m = 1 possibility)
-Avg. Hit Rate Across All Pairs/Time Frames = 60.8%

NY Daily Candle Close 5pm EST time
-11 Pairs that made the cut for min. performance profitability
-Across 4 Time Frames (Daily, 4hr, 1hr, 30m)
-24 Profitable Possibilities
-Avg. Hit Rate Across All Pairs/Time Frames = 56.28%

Now looking at the stats above, we can see that although the NY Daily Close did have 2 more pairs that made the cut, and 2 more profitable possibilities (9% difference), the system actually across all pairs had a lower hit rate by over 4.5%.

If the NY Daily Candle Close Charts are that much superior, you’d think they’d perform better in the hit rate for sure – but they don’t, they perform worse!

A test on another system showed the exact same profitability whether you were trading the NY Daily Close or FXCM UK GMT Close.

How could this be if the NY Daily Close Charts are so superior?

The statistics alone should be spawning several questions in your mind, such as;

1) If the NY Close Charts are not superior, what does this mean for me and my system?
2) Should we still trade them, or should we switch to the UK GMT Charts?
3) Should we be asking for data behind a system being promoted as only being effective on the NY Daily Close Charts?

These are just some of the natural questions you should be asking when someone promotes a NY Daily Close Chart as the only effective charting for trading price action – because the data and statistics simply do not support this.

One last point I want to mention here – is that most of the options out there being suggested are for Pepperstone or Axi Trader (both using MetaTrader 4).
Although MT4 does have some uses if you are trading algo based systems, its execution on short term, or market orders is quite inferior.

In a follow up New York Close Forex Chart article, I’ll be discussing another platform option which I find to be superior to MT4 in terms of execution, charting, and ease of use.

Kind Regards,
Chris Capre

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