So you already know what Forex is, why you should trade it, who makes up the Forex market and why you need to trade it.
Now it’s time for you to learn “when” you can trade Forex.
Indeed, although the Forex market is open 24 hours a day, it doesn’t mean the market has the same level of activity the whole day.
There are some periods during each day when price action is more volatile than others, in other words, when price movements are more interesting and… wide.
You can make money trading when the market moves up and when the market moves down.
Yet, can’t you make money when the market is not moving at all!
In fact, the best time to trade is when the market is the most active and therefore has the biggest volume of trades.
More active currency moves will create great opportunities to catch the trade and make some interesting profit.
But the worst time to try to make money trading is when the market is calm and doesn’t move at all, a slow market is literally wasting your time!
At that time, you are better off enjoying your life rather than watching the little market fluctuations…
We, as professional traders, do work less than the “average” person because we make money when there is money to be made!
To understand the different fluctuations, you have to know that there are three major financial centres around the world; and the activity in the currency market rises and falls when the markets in these regions are open (or closed) for business.
In fact, the Forex market has 3 major sessions linked to the activity of these 3 centers:
the Tokyo session, the London session, and the New York session.
The 3 sessions have very distinctive peculiarities.
The Asia session is the one with less liquidity; normally the market moves in a small range of pips without trending too much.
This is especially true for the EUR/USD (the only cross we trade with our Intraday M30 Strategy) and for the Yen pairs (the ones we trade with our Swing & Relax H4 Strategy).
The London session
While there are several financial centres all around Europe, it is on London that market participants keep their eyes.
Historically, London has always been a centre of trading, thanks to its strategic location.
It’s no wonder that it is considered to be the Forex capital of the world, with thousands of businessmen making transactions every single minute. In fact, about 30% of all Forex transactions happen during the London session.
Due to that reason, the London session is by far the easiest session to trade, with more volume and good, clear trends to catch.
The New York session
This session is normally far more volatile and difficult than the London one. This is because the news normally comes out before Wall Street opens.
That news transforms the EUR/USD into a beast and the pair becomes untradeable for at least 30 minutes.
Finally, when the overlap with the London session finishes, it tends to become more volatile…
The European session normally provides the most movement. That’s why we decided to do our Live Trading Session during the London session.
However, once the Live Trading Session is closed we continue to look for set-ups during the overlap between the London session and the New York one.
And even when the London session closes, we are always looking for opportunities. We then email or sms our members, in order to make money during the New York session as well!
THE 4 BIG “NO”
It’s time now to build our little Castle, our inviolable blockhouse.
When we trade we must protect ourselves, because trading is almost like a war, you (the small fish) against the big boys.
The only way to survive and strive against them, is to follow a clear set of rules.
Just like a religion.
There are no excuses.
Those rules are just like the bricks of a castle, and speaking about “When to trade Forex” we can summarise it with our 4 important rules…
“NO” #1: DONT TRADE DURING US and UK BANK HOLIDAYS
During these days, the pip range becomes very poor, volume goes down and trading becomes useless. Only the Forex-addicted trade during these days and normally they lose all the pips they made during the previous days.
During these days we enjoy life, keeping the PC shut down.
“NO” #2: DONT TRADE ON FRIDAYS
Yes we are long weekender! Sounds good huh?
Yes but that’s not because we are lazy pigs…
In fact, there are at least 3 reasons why the clever trader doesn’t trade on Fridays:
a) SMALLER MARKET: liquidity tends to be small and dies down, especially during the NY session. So remember, you can make money trading when the market moves up and when the market moves down but you can’t make money when the market is not moving at all.
b) TRICKY MARKET: on Friday, big boys (banks, hedge fund etc, …) tend to close their positions. Nobody likes to go into the weekend with open trades.
Everything can happen in the world in two days and if the market will open with a big gap (difference between the closing price of Friday and the opening price of Sunday), wider than your stop-loss let’s say, your stop-loss will not be hit and you will have a very bad situation to manage.
This is true for us and for big boys as well. So normally during Friday, the market becomes less clean because many positions (very big positions as well) are closed for security reasons.
A less clean market means less clean charts and less clean charts means more risk.
c) LAST MARKET
If you make a loss on Friday you don’t have a Saturday to recover. This seems a stupid and obvious consideration but it’s crucial if you want to reach the right mind-set to become a successful trader.
It is not the subject of this video, and you will learn much more about it when you will join our community, but for the time being remember that we are completely devoted to the mind.
Everything in our strategies is built to calm the mind during trading, to let the mind be still, concentrated and free of emotions.
Entering your weekend with a negative trade might affect your free time. You will start the new week with a bad approach, the approach of revenge, which is always as bad in trading as in life.
Furthermore, the weekend is key for the trader.
Our weekends are made up of 3 days we take to completely relax and enjoy our life, with the help of our earned gains!!!
“NO” #3: DONT TRADE on NFP DAY
Nonfarm payroll employment is an influential statistic and economic indicator released monthly by the United States Department of Labor as part of a comprehensive report on the state of the labor market.
NFP comes out every first Friday of the month right before the NY session. During these Fridays, the market does nothing until the release of the important news. During the announcement of the news the market goes crazy, making flash movements, and making it very difficult to trade.
As we don’t trade on Fridays anyway, we don’t really have to look out for that day.
“NO” #4 DONT TRADE DURING BIG NEWS ANNOUNCEMENT
For our unique Intraday Strategy, we don’t trade during the announcement of big news. How to know which news is big and when they come out?
We check our Forex Factory Calendar and if the news is red or orange we stay out of the market for 30 minutes.
Because during the announcement of big news, the market becomes volatile and you have to widen your stop-loss, which means more risk.
Furthermore, there’s no need to catch those crazy moves to make lots of money trading Forex!
We just wait for the market to calm down a little and start back afterwards…
Now you know exactly which are the perfect days and hours to trade Forex and when to avoid entering the market.
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