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When To Trade Forex For Maximum Gains

Trade Forex

One of the most wonderful aspects of the trade forex marketplace is that anyone can trade forex at any time. Depending upon your location and investment interests, this can mean a level of profitability never attained before. For instance, if you live in a country with a deflationary environment (e. g., Japan), the ability to invest in higher interest rate Australian dollars (via the AUD/JPY) is a financial delight. Similarly, for anyone who has noticed the bullish “inverse head and shoulders” pattern on the weekly EUR/AUD chart, going long, in the form of a “day trade”, can be most lucrative. Ditto with the 3-year, bullish, “rounding bottom” found on the weekly USD/CAD chart.
It’s best to launch trades in their natural regional markets. (Bid/ask spreads are tighter, limit fills are more plentiful and little “slippage” occurs in hitting stop losses.) For AUD-led pairs, this means when Sydney is open. For EUR-led pairs, this means when London is open. For USD/CAD or USD/JPY, this means when New York City is open.

Can You Trade Forex Any Time Of Day?

Theoretically, you can trade forex any time that your trading platform will allow you. Some platforms allow non-stop trading, 24/7; others are restricted, only offering services Mondays through Fridays. Realistically, it doesn’t matter what kind of “open hours” your platform has as long as you can trade around the clock between Tuesday morning and Friday morning. This is when trade volumes are the highest, bid (buy)/ask (sell) spreads are the tightest and your chances of getting your stop loss hit at the price you set are the best (i. e., “little slippage”). This is “prime time” in the forex industry and an astute trader will try to trade only during this time zone (i. e., avoiding Friday and all weekends).

The Best Time To Trade Forex For A Better Return

The best time to trade a currency pair is when your charts tell you to or when your trading programme sends you a trading signal. When and how this happens depends upon whether or not you are “day trading”, “swing trading” or “trend trading”. Day traders may get 2-4 trade signals in 1 day. Swing traders may discover 2-4 trade signals in 1 week. Trend traders may notice 2-4 trade signals in 1 month. For day and swing traders, the amount of leverage used and their trade execution prices control their profitability. In contrast, trend traders usually trade with a reduced amount of leverage and are not so sensitive to entry/exit pricing, using their pricing position to create a profit.

Assess The Markets Carefully Before You Trade Forex

The forex industry is so big that it naturally breaks down into 3 regional markets (“the Asian trading session”, “the European trading session” and “the North American trading session”). Depending upon which currency pair you are trading, you may find yourself favouring 1 market over the others. For example, if you love to trade AUD-led pairs, then trading when Sydney is open makes sense (because with all the Australian banks also trading during this time period, spreads and fills are usually very good). On the other hand, if you are a USD/CAD aficionado, the same thing could be said about when Toronto is open during the North American trading session. For EUR/GBP fans, however, London is where it’s happening.

 

 

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