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Which close for forex daily chart?

The forex market is the largest and most liquid financial market in the world. It operates 24 hours a day, five days a week, and has a daily trading volume of over $5 trillion. As a forex trader, your goal is to identify trends in the market and make profitable trades. One tool that can help you achieve this goal is the daily chart.

The daily chart is a popular time frame used by forex traders to analyze price movements over a 24-hour period. It shows the opening, closing, high, and low prices for each day. The question that many forex traders ask is, which close should I use for the daily chart?

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There are three types of daily chart closes that traders can use: the New York close, the London close, and the local close. Each has its own advantages and disadvantages, and it’s up to the trader to decide which one to use.

The New York Close

The New York close is the most popular daily chart close used by forex traders. It’s based on the closing time of the New York stock exchange, which is 4 pm EST. The advantage of using the New York close is that it aligns with the daily close of the majority of forex brokers. This means that the daily candlestick patterns will be consistent across different brokers.

Another advantage of using the New York close is that it reflects the trading activity in the US market, which is the largest financial market in the world. Many forex traders believe that the US market sets the tone for the rest of the world, and therefore, the New York close is the most relevant one to use.

However, the downside of using the New York close is that it may not be the best fit for traders who live in different time zones. For example, if you live in Australia, the New York close will occur at 6 am your time. This may not be convenient for traders who prefer to analyze the charts during their daytime hours.

The London Close

The London close is based on the closing time of the London stock exchange, which is 4 pm GMT. It’s the second most popular daily chart close used by forex traders. The advantage of using the London close is that it aligns with the trading activity in the European market, which is the second-largest financial market in the world.

Many forex traders believe that the European market has a significant impact on the forex market, and therefore, the London close is a relevant one to use. Additionally, the London close may be more convenient for traders who live in Europe or the Middle East, as it occurs during their daytime hours.

However, the downside of using the London close is that it may not align with the daily close of all forex brokers. This may result in inconsistencies in the daily candlestick patterns across different brokers.

The Local Close

The local close is based on the closing time of the forex market in your local time zone. It’s the least popular daily chart close used by forex traders. The advantage of using the local close is that it’s the most relevant one to use for traders who live in different time zones. It allows them to analyze the charts during their daytime hours.

However, the downside of using the local close is that it may not align with the daily close of all forex brokers. This may result in inconsistencies in the daily candlestick patterns across different brokers. Additionally, the local close may not reflect the trading activity in the major financial markets, such as the US or European markets.

Conclusion

In conclusion, there are three types of daily chart closes that forex traders can use: the New York close, the London close, and the local close. Each has its own advantages and disadvantages, and it’s up to the trader to decide which one to use.

The New York close is the most popular one, as it aligns with the daily close of the majority of forex brokers and reflects the trading activity in the US market. The London close is the second most popular one, as it aligns with the trading activity in the European market. The local close is the least popular one, as it may not align with the daily close of all forex brokers and may not reflect the trading activity in the major financial markets.

Ultimately, the choice of daily chart close will depend on the trader’s preference and trading strategy. It’s important to choose a daily chart close that is consistent and relevant to your trading style.

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