Jul 18 2009
I would like to touch such an important issue as time of trading in Forex market. If you think that a successful trader is one who sits in front of the computer day and night making short brakes for food and sleep, then you are mistaken. Another option is to use
automated trading software
If you get exhausted of watching your charts and always feel sleepy chances are you are losing money in Forex. Profitable traders do not waste their time at charts trying to catch a price move when there is no volatility in the market.
No one became rich by trading in an exhausted state. Clear mind and alert state are necessary for making right trading decisions. Then when we should be trading and when taking the rest?
I have a couple suggestions for you. It is based on my experience. I hope it can help you to schedule your time for trading currencies. I always use US Eastern Time which is GMT-5, therefore you need to make necessary adjustments for your time zone.
Asian Trading Session
Evening and late night 5 pm - 11 pm (EST) is when Asian market is open. Financial institutions of Japan, China and Australia are active.
Trading during this time is not very active. Most currency pairs are not too volatile. European and American financial institutions are closed for the night. There is almost no price movement for major currency pairs. There are some exceptions though. For example important economic news releases in Japan can make some currencies more volatile.
You can do scalping trades during this period. However in my opinion it's not worth it. So if you have any open position make sure you placed stop loss order and go do something else besides trading in Forex.
The following couple of hours 11 pm - 1 am are usually the slowest time in the market. Even Asian financial institutions and traders are getting ready to go home. If you do decide to trade during this time the best currency pair to watch is any cross with Japanese Yen: GBP/JPY, EUR/JPY etc.
European and London Session
After Asian session comes one of the important session in Forex market. It is European session at 1 am until 4:30 am (EST). This is the time when European traders come into the market. It's an important time since very often it can set the trend for the rest of the day.
For anyone who wants to trade European session my advice would be to watch market carefully. During this time there is a high probability to find a good trading opportunity. At 4 am until 5 am (EST) be aware of important financial news releases.
Time frame from 4:30 am until 6 am is time when London financial institution and traders are most active. Usually around 5 am, 6 am British economic news can be released. The best currency pairs to trade in this session are crosses with Euro and British pound.
NY Trading Session
The highest volatility in the Forex market occurs in the first half of the New York session that opens at 8 am (EST). That's because two major - European and Us sessions are overlap during this time. The major players are active in this time period.
For a day trader this time period is probably the most active one. Many Forex traders trade only during New York session. Since it is the most volatile period it can present many good trading opportunities. Most of the economic news that move the price are released at 8:30. This activity slows down around 1 pm -2 pm (EST).
After that the volatility of the currency pairs gradually slow down. There can be news releases from the Federal Reserve. It comes around 2:15 pm. Sometimes it can affect the volatility in the market.
As you can see there is not too much time during the day when market presents the opportunity to trade profitably. Therefore when if you are a day trader and there is a time period when there is no activity, simply close your trading charts and go take a rest from your trading. Don't try to catch all the moves possible during the day. Otherwise it is a sure way to fail in Forex.To know all this nuances you need to
learn to trade Forex on a regular basis.
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Jul 14 2009
You probably already know that Forex is the market where foreign currencies are exchanged for one another. Forex market is worldwide market and it is not located in some certain place. It works all around the world that's why it's a global market.In this article I would like to give you a few
tips for beginner Forex traders
On the other hand a separate market for each currency pair exists. There is a different combination of the currency pairs and each of them has own price. The currency pairs may act as if they are completely independent on each other, but there is some correlation.
It is obvious that if the economy of some country goes through the crisis the price of its currency also will go down compare to currency prices from other countries. However among other countries there can be one that is in even worse economic situation, therefore the price against the currency of that country will go up. For instance the US dollar is falling against the Euro for a long time by now, however the same dollar may be rising against the Japanese yen.
The big participants who can influence the currency prices are banks and large financial institutions. These financial institutions hire professional Forex traders who trade for them. Those days when only big players could afford to trade currencies are over. Today anybody can get involved in Forex.
High speed Internet connection is recommended for anyone who wants to try to trade in Forex. Trying to trade Forex with dialup Internet may be very frustrating if you day trade. Very fast price changes may lead you to lose money if your dialup connection will not allow you to react with appropriate speed.
The most important thing is to find a right broker for you. Brokers usually offer quite high leverage. The leverage of 100 means with only $100 you can control the lot of size $10,000. The rest of the money comes from your broker. Therefore anyone can start trading currencies only with a few hundred dollars.
Another advantage of Forex market is its high volatility and liquidity. So what is liquidity. Liquidity shows us how quickly you can convert your investments back in cash. Traders in Foreign exchange trade nothing more but currencies that is cash already. Another meaning of liquidity is how quickly you can buy and sell. In Forex you can do it anytime unlike with some stock markets.
The volatility of the market shows how often the price changes. That's the reason why Forex has a potential to return high profit but also it can be a very risky business. Forex presents an opportunity of a very lucrative business. Large profit in relatively short time attracts most people to trade currencies. However only prepared and skillful traders who can take the risks can make profit consistently.
There are many traders who use indicators and chart patterns in order to predict the currency price movement. Using the charts and indicators traders are trying to forecast the price movement. But you need to
learn to trade in Forex market before you will be able to make money trading currencies.
But to become a profitable trader you also need to know about worldwide events that influence the currency prices. Knowing the date and time of such events can help you to make more profit or reduce your risks. You can exit the market or at least to put the stop losses closer to the current price before the news.
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Jul 11 2009
There are more and more people who want to make money online from home. It is an attractive way to make a living because you don't need to commute. Also there is no boss and no schedule to follow. Therefore you have more time to spend with family. It is especially appealing since in today's economy it's harder and harder to find a job you like and that pays you what you want. Practically anyone can
make money trading Forex.
One way to start your own home based business is to trade currencies in Forex market. With the rise of Internet everyone can do it from home. Many people get involved with Forex while still having full time job. Other people start trading because they lost their job or get retired, etc. Very soon people who have a full time job get so involved in Forex that they want to turn it into full time career. The most important thing is to
learn currency trading
Many of us have big dreams. They can even come true for some of us pretty quickly. However we need get in touch with reality and set the right target. The reality of Forex traidng is that many people lose money in their first year of trading. Why that happens and how we could avoid it happening to us?
The main problem, I think, with those people is that they base their trading decision on luck and intuition not skills and knowledge. This is a gambler mindset. Such people take trades as if they were betting in casino.
Unfortunately more and more traders enter the market with such mindset in the last few years. That's probably because online casinos were outlawed in the USA. People who get excited taking unnecessary risk and loosing money found Forex market.
However trading currencies has nothing to do with gambling. Even though trading and gambling may have some similarities. They both based on probabilities. Forex unlike gambling is a form of investing. Trader needs to learn skills, techniques and develop a system to be a profitable trader.
In my opinion the most important thing when you start trading Forex is to abandon your ideas about luck and intuition. You should stop using words like 'playing' while working on your trading in currency market.
Before you start trading in live account it is vitally important to learn the skills and understand the market. You need to develop a disciplined approach to the trading. Emotional control plays a big role for success in trading. You probably would hate to hear this but you need to apply significant effort before you start making any money in Forex.
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Jun 29 2009
Trading currencies in Forex is becoming more and more popular.We always see those advertisement about Forex. The question is: why Forex trading is becoming more and more popular? Firs reason is of course the size and volume of the market being traded on daily basis. Below is the list of reasons that make many people seriously consider joining the currency trading Market.And why you need to
learn Forex trading
High Return on Investment
What attracts people at first place is potential of making a lot of money with little investment. That became possible because brokers now offer trading with leverage. It is the leverage that allows people like you and me with small funds to trade currencies in such a big market.
People who open their accounts with retail brokers trade currencies with leverage. Leverage of 100 or even 200 is what normally offered by most brokers. Depositing only small amount of money into your trading account allows you to control lot sizes 100 or even 200 times larger than your investment.
Forex is the Largest Market
I mentioned before that Forex is one of the largest markets in the World. Currencies of equivalent to $4 trillion are being exchanged on average day. Unlike stocks or futures exchange Forex does not have the central exchange. However the big members of exchange like banks or other financial institutions are located in New York, London and Tokyo.
Instant Trade Execution
If you tried trading Forex even on a demo account you saw that orders are executed instantly. That's called liquidity. There always will be an order that is opposite to yours to get them executed quickly.
Currencies are Being Traded Around the World
Another unique feature of Forex it involves currencies of different countries by definition. That makes it a global market. Therefore if you are not sure in economic situation of one country you can switch to trading currency pair of other countries. For example I personally like to trade AUD/NZD since the economies of Australia and New Zealand are related and you don’t see very large moves. It makes it less profitable but it reduces the risk also.
It is Open 24 Hours 5 Days a Week
Since it is a global market the time when currencies are traded travels with the Sun from one country to another. That makes Forex open 24 hours a day. It closes only on weekends. Therefore you can choose your own time to trade. Also you can chose the time of volatility that you prefer. New York session is highly volatile and unpredictable for USD crosses. London session is also volatile but more predictable. And Asian session goes with much less volatility for US dollar pairs.
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Jun 29 2009
Trading currencies in Forex is becoming more and more popular.We all know that Forex market is one of the largest markets. This fact alone makes it so attractive to many people to join trading currencies. The same fact makes brokers to advertise it everywhere to attract more and more clients. There are number of other reasons why people come to Forex.And why you need to
learn to trade Forex
High Return on Investment
The first attractive feature of this market is of course the high leverage. Leverage makes it possible for brokers to attract everyday people like you and me to open trading account with small funds. This is what makes it so unique. For example stock or futures market do not have such big leverages.
People who open their accounts with retail brokers trade currencies with leverage. Leverage of 100 or even 200 is what normally offered by most brokers. Depositing only small amount of money into your trading account allows you to control lot sizes 100 or even 200 times larger than your investment.
Forex is the Largest Market
As I said before the first reason is the daily volume that is being traded. The daily amount of trades is close $4 trillion. Even though Forex does not have the central exchange there are banks and financial institutions that play major role in exchange. There are three major centers with such institutions: New York, London and Tokyo. Currencies of these three countries (US, Britain and Japan) are being traded the most.
Instant Trade Execution
If you are already involved in Forex then you know that orders are filled almost instantly. That is still because of the high volume that results in high liquidity. Therefore you will not get stuck with your position.
Currencies are Being Traded Around the World
What makes Forex unique is that traders trade currencies all around the world. That's one of the differences between foreign exchange and some other exchange markets. Currencies of many countries involved in trading. However some of them preferred more by traders than others. For instance Euro, Dollar, Yen and Pound have higher trading volumes than New Zealand Dollar for example.
Continuously Open Around the Week
The fact that countries around the World are involved in trading Forex makes it possible for traders to trade all day long. This market is open 24 hours a day and 5 days a week. Forex is closed on weekends. Such continuity makes it very convenient handy for traders to schedule their own time around the day to trade.
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