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Timing in FX Trading

Timing the FX Market

When you look at FX trading you will notice that timing is very important.  There are a number of timing issues that you need to consider before you actively start to trade FX.  If you don’t look at these issues then you could find yourself trading FX at the wrong time, and this can lead to major losses on the FX market.  The timing points that you should consider include the market sessions, timing with analysis and timing with FX trading strategies.

The FX Market Sessions

The FX market is made up of 4 different market sessions which create the 24 hour trading times unique to this market.  It is important that you know about the different market sessions and what they have to offer you.  The first step is to determine which market sessions you trading schedule falls into.  The timing of this will impact a lot of different aspects of your trading.  The market session impacts the currency pairs that you can use and the strategies that you should consider.

The currency pairs are affected by this timing because of the volatility and liquidity that you need.  If you are going to be trading fundamentally then you need to work in a market session where fundamental releases are made for your currency pair.

Timing and Market Analysis

Timing is very important when you are analysing the market.  The impact of timing will vary when you complete fundamental and technical analysis.  It is important that you consider the impact on both analysis types.

With fundamental analysis you have to get the timing correct because you need to know when the news release is coming.  You also have to consider the length of time that the reaction will last for.  If you do not analyse the market within this timeframe you will lose the trade opportunity.

The impact of time affects more areas with technical analysis than fundamental analysis.  With technical analysis you have to consider timeframes and timing of signals.  The timeframes that you use will affect the indicators that you can use.  There are certain indicators that you should not use when you are looking at short-term charts.  There are also other indicators that are better for short-term analysis.

Within the technical indicators you also have to consider the impact of timing on the signals that you get.  All trade signals are time sensitive and you need to make use of them before they disappear.

Timing and Trading Strategies

There are some people who do not consider the impact of time on the trading strategies that you can use.  Timing impacts strategies more than determining long or short-term trading.  When you look at strategies you have to consider whether they are right for when you are trading and the amount of time you have to trade.  If you are going to be trading during the market session overlap then you should consider the impact of this timing on long-term and short-term strategies.  The amount of time you have for the strategies is important because it affects how much analysis you can complete and how quickly you have to place orders.

 

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