The Best Forex Trading Hours

So you already know that with the help of Forex you can trade 24/7. But, you also know about some sessions, right? So what sessions when the trading is round the clock? If you don’t know about the different time zones and Forex trading hours, read on.

Forex Trading Sessions and Trading Hours

There are three types of trading sessions – the European, American and Asian (for example, Forex strategy ProFx trades during European and American sessions). And four variants of Forex trading hours – New York opens its trading time at 8 am and closes at 5 pm, Tokyo is open from 7 pm to 4 am, Sydney from 5 pm to 2 am and London is up from 3 am to noon. All in EST. So what do we see? All the markets are not round-the-clock but available for us to go into different markets and trade from morning till another morning. What Forex market hours are you fitting into depends on many things like your trading style, currency pairs you are trading and so on. If you’re going into scalping, you’d better prefer Asia Sessions, but for day trading it’s surely the best to enter European and American sessions. You can work with Asia Session while Tokyo market is open, European session is open with London market, while American Session is for New York market. Asia Session can be held mainly at night in the EST time, so it’s the best time for scalping. If you’re into intra day sessions and no overnight trading required – than you should definitely choose EU and US sessions.

Then More Volume then Better

So, which Forex market hours you’d better choose? Of course, to get more profit, you better enter those, when trading volume is higher. These Forex trading hours are those when few countries are trading at one time. So-called overlapped Forex trading hours. That’s when the markets are active and the percent of making big money is rising on your eyes. If we make a diagram, we would certainly see, when the markets overlap and find out when it’s best to trade. So, if you’re an early bird, then from 8 am to 12 pm is your chance to gain, because it’s time when London and New York markets overlap. If you’re trading GBP/USD, EUR/USD or USD/CHF – it’s the best Forex market hours you can go into. European and American markets are active in those hours. So you can trade and gain, trade and gain!

So, going on with Forex market trading hours, another overlap is from 1 am to 3 am, for those who sleep badly, you can catch both London, Tokyo and Sydney markets and raise your trades because of active work of those markets.

And, Fx trading hours from 7 pm to 10 pm are special for those who work with Asian andAustralian markets. Another overlap is happening in those Forex trading hours, so – another opportunity to raise your trades.

So, as you can see, knowing Forex trading hours provides you the best possibilities to gain more – 24 hours a day, different currencies, different Forex market hours – one way to win.

More About Forex Hours

Diagram with information about trading hours and time zones can be viewed here: Forex Trading Hours. Spreadsheet in PDF format can be downloaded here, and if you want to be always informed about which session is active you should download our free MT4 custom indicator FX Pulse. It displays market hours, news and much more useful information directly on your chart.http://www.forexeasystems.com/forex-articles/the-best-forex-trading-hours

Fundamentals on Forex

There are many games to try your luck but definitely forex trading is not a game of chance. We therefore always advise our clients to at least gain a basic understanding of the Forex market and what influences the prices of different currency pairs before they start trading. In general, fluctuations in exchange rates are caused by Fundamental and/or Technical factors. In this article we outline the basic fundamental considerations.

• Political conditions
• Actual monetary flows (flows for imports, exports, mergers, acquisitions) and expectations of changes in monetary flows.
• Major news which is released publicly, often on scheduled dates and times which include:

(a) Economic policy formulated by central banks,

(b) Economic conditions generally revealed through economic reports (GDP growth, inflation, unemployment, relative interest rates, budget and trade deficits or surpluses, consumer confidence etc).

§ Market Psychology

 

Political Conditions

Internal, regional, and international political conditions and events can have a profound effect on currency markets. All exchange rates are susceptible to political instability (ahead of elections for example) and anticipations about the new ruling party. Political upheaval and instability can have a negative impact on a nation's economy. Also, events in one country or a region may spur positive or negative interest in a neighboring country and, in the process, affect its currency.

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Monetary Flows

Large mergers and acquisitions can create an often temporary demand for a particular currency which can cause the currency to strengthen. The trade flow between countries illustrates the demand for goods and services, which in turn indicates demand for a country's currency to conduct trade. Surpluses and deficits in trade of goods and services reflect the competitiveness of a nation's economy. Large trade deficits (imports > exports) usually have a negative impact on a nation's currency.

Economic Policy

• Fiscal policy which is essentially the way a government chooses to manage its revenues (tax) and expenses (spending on health, education and defense). The difference between the two is the government deficit/surplus. A country’s currency usually reacts negatively to widening government budget deficits, and positively to narrowing budget deficits. 
   
• Monetary policy which is the way in which a government's central bank influences the supply and "cost" of money. The cost of money is reflected on a currency’s interest rate while the money supply is managed with the buying or selling by the central banks of government bonds. High real interest rates (nominal interest rates less inflation) usually tend to attract capital causing a currency to strengthen. The level of interest rates also affects the domestic economy in that a high interest rate tends to slow economic growth and inflation, while in periods of low growth or deflation central banks use low interest rates to stimulate growth or bring inflation back to target. Adding money supply (buying government bonds back from the market-quantitative easing) is used to stimulate growth and inflation, whereas withdrawing money supply (selling government bonds) is slowing growth and inflation. Excess money supply tends to weaken a country’s currency while low money supply tends to strengthen a country’s currency.

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Economic conditions

There are many economic statistics published on a weekly/monthly basis (you can keep track of upcoming data and expectations by checking our Economic calendar onwww.tfifx.com- In the calendar we provide a short description of the data, the previous release number as well as the market expectation for the upcoming release). Traders watch these figures closely, forecasting the likely result and reacting to the actual figure according to whether it is better than forecast, in which case the market will rise, or worse than forecast, in which case the market will fall. The most closely watched data are:
 

Inflation levels and trends
Typically a currency will lose value if there is a high level of inflation in the country or if inflation levels are perceived to be rising. This is because inflation erodes purchasing power, thus demand, for that particular currency. However, a currency may sometimes strengthen when inflation rises because of expectations that the central bank will raise short-term interest rates to combat rising inflation.
 

Economic growth and health
Reports such as GDP, employment levels, retail sales, capacity utilization and others, detail the levels of a country's economic growth and health. Generally, the more healthy and robust a country's economy, the better its currency will perform.

While economic numbers reflect economic policy, some reports and numbers can have a more muted or dubious effect: the number itself becomes important to market psychology and may have an immediate impact on short-term market moves, however, what influences the market on a sustained basis can change over time. In recent years, for example, money supply, employment, trade balance figures and inflation numbers have all taken turns in the spotlight.

Market psychology
 

Unsettling international events can lead to a "flight to quality," with investors seeking a "safe haven". Under such market conditions, there will be a greater demand and thus a higher price for currencies perceived as safer over their relatively riskier counterparts. The Swiss franc and US dollar have been traditionally perceived to be safe havens and usually gain during times of political or economic uncertainty.

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http://www.tfifx.com/how-to-trade-forex/fundamentals-on-forex.aspx

Currency Trading Tip • Creating a Trading Strategy

One of the most common mistakes new forex traders do, is that they have no trading strategy. Because of the many appealing characteristics (24 hours, trade both short and long, leverage etc) most of the new traders entering the market are eager to prove themselves in an often egoistic approach. Egoistic in that they believe that they can become very profitable and make a fortune in the short term, but soon enough they end up with a bad psychology which at the end accelerates their loosing pattern. In fact, the most successful forex traders are people recognized for their humility and discipline. These qualities are acquired trough experience and accepting some simple realities of the forex market. 
 

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The first step towards becoming profitable in the forex market is to devise a trading strategy/plan. Creating a trading strategy is of paramount importance and is actually very easy. To create a successful trading strategy, traders should address the following considerations:
 

1. Reasoning of the trade: Why buy or sell? Which pair? 
2. Timing of the trade: Why now? Before economic news releases or after?Day or night?
3. Trading objective: What is the take profit target? What is the stop loss?
4. Money management.
5. Documentation and analysis of the results.

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Before entering a trade there should be a good reason. Many times traders are entering a position because of boredom or just to feel the excitement of being long or short. This is a recipe for disaster! You should always buy or sell any pair on a reason that makes sense to you. Whether this reason is fundamental or technical or both, always make sure there is a reason. What currency pairs will you trade? This sounds simple, but it is easy to get confused if you don’t define this. From our experience we strongly believe that is best to concentrate on some (not all) major pairs (such as EURUSD, GBPUSD and USDJPY) and don’t waste time with illiquid, choppy pairs. You also have to determine when you will trade and how often you will trade. Are you going to be a day trader or hold positions for a longer period of time? Your schedule and responsibilities may have some impact on that. Should you trade before economic releases or after? Should you trade heavily on nights, during UK open and close etc? It is important to define these basic ideas to begin to form some consistency and discipline.

 

The second step is to define your trading objectives. What is your end goal? What is your take profit target and your stop loss limit? Try to place your take profit and stop loss before entering the trade as you can always change that, if something important happens in the markets in the meantime. Most traders tend to take their profits early while letting their losses run. This is because in the inexperienced traders mindset is very difficult to accept that he/she is wrong. Placing your stop loss at the time you open a trade will help you create discipline and learn that sometimes you will be wrong. Furthermore, most new traders have completely unrealistic goals. Making big returns in the first year of trading is possible but highly improbable. These unrealistic expectations wipe out a lot of traders before they even had the chance to learn the market. Breaking even in the first year is an admirable goal; many traders do not do that. If a trader makes 20-30% on their initial investment in their first year, that is outstanding.
 

Money management is probably the most important aspect of trading. First you have to accept that in trading nobody can have a 100% winning ratio and everybody (even the most experienced traders) are sometimes wrong. Accepting that sometimes you might be wrong is again of paramount importance. The key here is accepting you are wrong before your mistake becomes too big. To do that you need to determine how much equity you have to fund you account. Then you must determine how much risk you are willing to take on each trade. Most experienced traders risk 1-4 % of their account balance on each trade. This may look too low to the new forex traders, but will definitely help you avoid big losses, create the necessary discipline and keep you in the market in order to get the necessary experience. Also very important is to have a positive percentage of winning trades compared to losing trades and a positive average profit compared to the average loss ratio. If your average loss is two times your average profit that means you need to make 10 profitable trades to cover 5 losing trades. Keep this in mind.
 

Along with money management, it is vital to keep track of your past trading and results in order to recognize past mistakes and avoid them in the future.

This is just a basic start to having a successful trading strategy in the long run but will definitely help new traders get the discipline required to be profitable in the very exciting Forex market.  
 

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http://www.tfifx.com/how-to-trade-forex/currency-trading-tips.aspx

Money Management – The Key to Success in Online Forex Trading

Money management is 80 percent of any investment plan and the most important aspect in trading the Forex market, the remaining percentage is used for implementing a solid trading system, method or strategy.

For a proper money management you will need to include these 5 principles:

http://www.tradefxplus.com/money-management.html

1. Proper money management controls the amount of money you will invest each time, based solely on the account equity curve (your profit/loss overtime). 2. Proper money management considers both risk and reward factors. Know your risk potential at any time; don't "close one eye". It's easy to think only about what would be your profits. 3. Proper money management takes into consideration the value of the entire account; your capital is the most important! You can't invest with $0. Don't let few minor losses destroy your entire capital and force you to make hundreds percentage in profit just to retrieve your principal. 4. Proper money management discounts all factors that cannot be mathematically proven or formulate.Your thoughts and emotions can't be implemented in proper money management plan/formula. 5. Proper money management formula should give you one outcome for an each set of variables, without any guesswork.

How to Read a Chart & Act Effectively

Introduction

This is a guide that tells you, in simple understandable language, how to choose the right charts, read them correctly, and act effectively in the market from what you see on them. Probably most of you have taken a course or studied the use of charts in the past. This should add to that knowledge.

Recommendation

There are several good charting packages available free. Netdania is what I use.

Using charts effectively

The default number of periods on these charts is 300. This is a good starting point;

• Hourly chart that’s about 12 days of data.
• 15 minute chart its 3 days of data.
• 5-minute chart it’s slightly more than 24 hours of data.

You can create multiple "tabs" or "layouts" so that it’s easy to quickly switch between charts or sets of charts.

What to look at first

1. Glance at hourly chart to see the big picture. Note significant support and resistance levels within 2% of today’s opening rate.

2. Study the 15 minute chart in great detail noting the following:

• Prevailing trend
• Current price in relation to the 60 period simple moving average.
• High and low since GMT 00:00
• Tops and bottoms during full 3 day time period.

How to use the information gathered so far

1. Determine the big picture (for intraday trading).

Glancing at the hourly chart will give you the big picture – up or down. If it’s not clear immediately then you’re in a trading range. Lets assume the trend is down.

2. Determine if the 15 minute chart confirms the downtrend indicated by big picture:

Current price on 15-minute chart should be below 60 period moving average and the moving average line should be sloping down. If this is so then you have established the direction of the prevailing trend to be down.

There are always two trends – a prevailing (major) trend and a minor trend. The minor trend is a reversal of the main trend, which lasts for a short period of time. Minor trends are clearly spotted on 5-minute charts.

3. Determine the current trend (major or minor) from the 5 minute chart:

Current price on 5-minute chart is below 60 period moving average and the moving average line is sloping downward – major trend.

Current price on 5-minute chart is above 60 period moving average and the moving average line is sloping upward – minor trend.

How to trade the information gathered so far

At this point you know the following:

• Direction of the prevailing trend.
• Whether we are currently trading in the direction of the prevailing (major) trend or experiencing a minor trend (reaction to major trend).

Possible trade scenarios:

1) Lets assume prevailing (major) trend is down and we are in a minor up-trend. Strategy would be to sell when the current price on 5-minute chart falls below the 60 period moving average and the 60 period moving average line is sloping downward. Why? Because the prevailing trend is reasserting itself and the next move is likely to be down. Is there more we can do? Yes. Look for further confirmation. For example, if the minor trend had stalled for a while and the lows of the past half hour or hour are very close to the 5 minute moving average then selling just below the lows of the past half hour is a better place to enter the market then just below the moving average line.

2) Lets assume prevailing (major) trend is down and 5-minute chart confirms downtrend. Strategy would be to wait for a minor (up trend) trend to appear and reverse before entering the market. The reason for this is that the move is too “mature” at this point and a correction is likely. Since you trade with tight stops you will be stopped out on a reaction. Exception: If market trades through today’s low and/ or low of past three days (these levels will be apparent on the 15 minute chart) further quick downward price action is likely and a short position would be correct.

3) A better strategy assuming prevailing trend down, 5-minute chart down, and just above days lows is to BUY with a tight stop below the day’s low. Your risk is limited and defined and the technical condition (overdone?) is in your favor. Confirmation would be if today’s low was a bit higher than yesterday’s low and the price action indicated a very short-term trading range (1 minute chart) just above today’s low. The thinking here is that buyers are not waiting for a break of today’s or yesterday’s low to buy cheaper; they are concerned they may not see the level.

4) Generally speaking, the safest place to buy is after a sustained significant decline when the bottoms are getting higher. Preferably these bottoms will be hours apart. By the third or forth higher bottom it is clear a bottom is in place and an up-move is coming. As in the example above your risk is limited and defined – a low lower than the last low.

5) The reverse is true in major up-trends.

Other chart ideas

• There are always two trends to consider – a major trend and a minor trend. The minor trend is a reversal of the major trend, which generally lasts for a short period of time.
  
• Buying above old tops and selling below old bottoms can be excellent entry levels; assuming the move is not overly mature and a nearby reaction unlikely.
  
• When a strong up move is occurring the market should make both higher tops and higher bottoms. The reverse is true for down moves- lower bottoms and lower tops.
  
• Reactions (minor reversals) are smaller when a strong move is occurring. As the reactions begin to increase that is a clear warning signal that the move is losing momentum. When the last reaction exceeds the prior reaction you can assume the trend has changed, at least temporarily.
  
• Higher bottoms always indicate strength, and an up move usually starts from the third or fourth higher bottom. Reverse this rule in a rising market; lower tops…
  
• You will always make the most money by following the major trend although to say you will never trade against the trend means that you will miss a lot of opportunities to make big profits. The rule is: When you are trading against the trend wait until you have a definite indication of a selling or buying point near the top or bottom, where you can place a close stop loss order (risk small amount of capital). The profit target can be a short-term gain to nearby resistance or more.
  
• Consider the normal or average daily range, average price change from open to high and average price change from open to low, in determining your intra-day price targets.
  
• Do not overlook the fact that it requires time for a market to get ready at the bottom before it advances and for selling pressure to work it’s way through at top before a decline. Smaller loses and sideways trading are a sign the trend may be waning in a downtrend. Smaller gains and sideways trading in an up trend.
  
• Fourth time at bottom or top is crucial; next phase of move will soon become clear… be ready.
  
• Oftentimes, when an important support or resistance level is broken a quick move occurs followed by a reaction back to or slightly above support or below resistance. This is a great opportunity to play the break on the “rebound”. Your stop can be super tight. For example, EURUSD important resistance 1.0840 is broken and a quick move to 1.0860, followed by a decline to 1.0835. Buy with a 1.0820 stop. The move back down is natural and takes nothing away from the importance of the breakout. However, EURUSD should not decline significantly below the breakout (breakout 1.0840; EURUSD should not go below 1.0825.
  
• After a prolonged up move when a top has been made there is usually a trading range, followed by a sharp decline. After that, a secondary reaction back near the old highs often occurs. This is because the market gets ahead of itself and a short squeeze occurs. Selling near the old top with a stop above the old top is the safest place to sell.
  
• The third lower top is also a great place to sell.
  
• The same is true in reverse for down moves.
  
• Be careful not to buy near top or sell near bottom within trading ranges. Wait for breakaway (huge profit potential) or play the range.
  
• Whether the market is very active or in a trading range, all indications are more accurate and trustworthier when the market is actively trading.

Limitations of charts

Scheduled economic announcements that are complete surprises render nearby short-term support and resistance levels meaningless because the basis (all available information) has changed significantly, requiring a price adjustment to reflect the new information. Other support and resistance levels within the normal daily trading range remain valid. For example, on Friday the unemployment number missed the mark by roughly 120,000 jobs. That’s a huge disparity and rendered all nearby resistance levels in the EURUSD meaningless. However, resistance level 200 points or more from the day’s opening were still meaningful because they represented resistance to a big up move on a given day.

Unscheduled or unexpected statements by government officials may render all charts points on a short-term chart meaningless, depending upon the severity of what was said or implied. For example, when Treasury Secretary John Snow hinted that the U.S. had abandoned its strong U.S. dollar policy.http://www.goforex.net/reading-charts.htm

Essential Elements of a Successful Trader

All the foreign exchange trading knowledge in the world is not going to help, unless you have the nerve to buy and sell currencies and put your money at risk. As with the lottery “You gotta be in it to win it”. Trust me when I say that the simple task of hitting the buy or sell key is extremely difficult to do when your own real money is put at risk.

You will feel anxiety, even fear. Here lies the moment of truth. Do you have the courage to be afraid and act anyway? When a fireman runs into a burning building I assume he is afraid but he does it anyway and achieves the desired result. Unless you can overcome or accept your fear and do it anyway, you will not be a successful trader.

However, once you learn to control your fear, it gets easier and easier and in time there is no fear. The opposite reaction can become an issue – you’re overconfident and not focused enough on the risk you're taking.

Both the inability to initiate a trade, or close a losing trade can create serious psychological issues for a trader going forward. By calling attention to these potential stumbling blocks beforehand, you can properly prepare prior to your first real trade and develop good trading habits from day one.

Start by analyzing yourself. Are you the type of person that can control their emotions and flawlessly execute trades, oftentimes under extremely stressful conditions? Are you the type of person who’s overconfident and prone to take more risk than they should? Before your first real trade you need to look inside yourself and get the answers. We can correct any deficiencies before they result in paralysis (not pulling the trigger) or a huge loss (overconfidence). A huge loss can prematurely end your trading career, or prolong your success until you can raise additional capital.

The difficulty doesn’t end with “pulling the trigger”. In fact what comes next is equally or perhaps more difficult. Once you are in the trade the next hurdle is staying in the trade. When trading foreign exchange you exit the trade as soon as possible after entry when it is not working. Most people who have been successful in non-trading ventures find this concept difficult to implement.

For example, real estate tycoons make their fortune riding out the bad times and selling during the boom periods. The problem with trying to adapt a 'hold on until it comes back' strategy in foreign exchange is that most of the time the currencies are in long-term persistent, directional trends and your equity will be wiped out before the currency comes back.

The other side of the coin is staying in a trade that is working. The most common pitfall is closing out a winning position without a valid reason. Once again, fear is the culprit. Your subconscious demons will be scaring you non-stop with questions like “what if news comes out and you wind up with a loss”. The reality is if news comes out in a currency that is going up, the news has a higher probability of being positive than negative (more on why that is so in a later article).

So your fear is just a baseless annoyance. Don’t try and fight the fear. Accept it. Have a laugh about it and then move on to the task at hand, which is determining an exit strategy based on actual price movement. As Garth says in Waynesworld “Live in the now man”. Worrying about what could be is irrational. Studying your chart and determining an objective exit point is reality based and rational.

Another common pitfall is closing a winning position because you are bored with it; its not moving. In Football, after a star running back breaks free for a 50-yard gain, he comes out of the game temporarily for a breather. When he reenters the game he is a serious threat to gain more yards – this is indisputable. So when your position takes a breather after a winning move, the next likely event is further gains – so why close it?

If you can be courageous under fire and strategically patient, foreign exchange trading may be for you. If you’re a natural gunslinger and reckless you will need to tone your act down a notch or two and we can help you make the necessary adjustments. If putting your money at risk makes you a nervous wreck its because you lack the knowledge base to be confident in your decision making.

Patience to Gain Knowledge through Study and Focus

Many new traders believe all you need to profitably trade foreign currencies are charts, technical indicators and a small bankroll. Most of them blow up (lose all their money) within a few weeks or months; some are initially successful and it takes as long as a year before they blow up. A tiny minority with good money management skills, patience, and a market niche go on to be successful traders. Armed with charts, technical indicators, and a small bankroll, the chance of succeeding is probably 500 to 1.

To increase your chances of success to near certainty requires knowledge; acquiring knowledge takes hard work, study, dedication and focus. Compile your knowledge base without taking any shortcuts, thereby assuring a solid foundation to build upon.

Reference:

http://www.goforex.net/essential-elements.htm