When it’s all said and done, the amount of time – in a usual trading week for foreign exchange Sydney – is quite minimal. Mondays can have problematic liquidity because many traders are busy in meetings or reading research reports. Fridays usually feature dismal liquidity because Saturday and Sunday are coming up fast. This leaves Tuesdays, Wednesdays and Thursdays, the mornings of which have the best trading volumes. In other words, 12 hours/trading week. To make every hour count, you should have all your research done before you open a trade. You should also have your trading plan memorised and know exactly what you are looking for and how you are going to trade it. If conditions are less than optimal, you stand aside. These are the marks of a professional.
In such a situation, you have no time for losses. Modulate your leverage to fit the trading conditions before you. Try to deploy limit orders and always use stop losses. When in doubt, get out.
Conducting Research For Better Foreign Exchange Sydney Trades
In foreign exchange Sydney, to the extent that you keep learning, your trading should get better and better. Therefore, spend as much time as you can researching what you think you might be weak on. If you’re up to speed on the Reserve Bank’s monetary policies, go chew on the Bank of Japan’s or the US Federal Reserves’. Both have websites that are very educational. Similarly, learning what the research departments of large international banks, like Barclays or Citigroup, are thinking about potential forex trades is always worthwhile. Visit their websites or those of news organisations like Reuters and Bloomberg. Or, go back to “Chart School” – literally – at “stockcharts.com”. Figure out why a “Stochastic RSI” might be more useful than a regular “RSI”.
Timing Trades Carefully For Foreign Exchange Sydney
Day traders have to concern themselves with timing issues more than trend traders (who also have to worry about positional issues). Since morning sessions have more volume than afternoon sessions, it behoves day traders to rise with the morning sun and try to bag a profit before lunch. Trading on Fridays and through the weekend is not a good idea; conditions can be highly illiquid and price gaps can occur. Mondays are problematic because many traders are in meetings and not at their desks. So, that leaves from 8:00 to noon on Tuesdays, Wednesdays and Thursdays for a day trader to make some money. Impossible? Hardly, particularly if you use high leverage ratios, trading off of a 5-minute chart.
Cutting Losses Trading Foreign Exchange Sydney
One of the easiest ways to lose your trading capital is to launch a trade without any stop losses and then, eat dinner and go to bed. In the morning, you discover that Europe or North America (or both) traded in the opposite direction of your trade and blew up your cash margin. (If you had multiple contracts outstanding, then the blow up happened multiple times.) So, never – ever – leave a trade open without stop losses in place! Furthermore, if you’re not sure you understand how “fickle” (that’s a non-finance word for “volatile”) a currency pair can get, use an “Average True Range” (“ATR”) indicator, on a daily chart, and take a reading. If it’s high, reduce your leverage.