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Tips For When You Trade Forex

Trade Forex

For anyone who wants to trade forex successfully, researching various winning trading strategies is far more important than worrying about what time of the day to trade forex. If your strategy is a good one (i. e., it has an 80% or better profitable ratio), then the strategy is so pricing sensitive that it will tell you when to trade forex. All you will have to do is decide whether or not the trading signal is a strong one or not. In order to do this, you need to keep up with international economic news – as it happens – and be aware of what is coming up, in the next 24 hours, on the global economic calendar. In general, strong trading signals occur when a pricing trend is moving through the forex markets (e. g., spring 2013 falling global iron ore prices).
One thing that many traders forget is that currency pair volatility can vary by regional market. Use an “Average True Range” (“ATR”) indicator, on a daily chart, before you launch a trade.

Best Time To Trade Forex

There is really no time of the day that’s better for trading forex. For the most part, your success depends upon which currency pair you have targeted and what kind of trading strategy you have decided to deploy. For instance, if you have decided to “day trade” the AUD/USD, using a 5-minute chart and a 100:1 leverage ratio, using “Bollinger Bands®” or a “Williams R%” is probably not going to help you. On the other hand, deploying a pair of time-differentiated exponential moving averages, coupled with a “Fisher Transform”, could be a stunning success story. Fridays and Mondays can have problematic liquidity issues. If possible, trade during the middle of the week only, favouring Sydney or London morning sessions.

How Much Research Is Necessary Before You Trade Forex?

In forex, knowledge is power. The more research you do before you start trading, the higher your chances of success. If you have a background in finance and economics, then worry about your trading skills (i. e., executing a trade), practising on a “demo account” until you can make a profit 6 out of 10 times. If you’re a newbie, hit the internet and start reading about all of the following: central bank monetary policies, commercial bank market-making activities, key macro- and micro-economic indicators, advanced technical charting techniques and why the global economic calendar on a trading platform is so important. Then, sign up for a “demo” and start practising your moves. Demos are risk-free; they’re great teaching tools.

Top Tips For Making Gains When You Trade Forex

Conservative traders may want to only trade in the mornings of Tuesdays, Wednesdays and Thursday, when liquidity is high and trades are usually executed in a smooth and cost-effective manner. Use an “Average True Range” (“ATR”) indicator, on a daily chart, to check out how volatile a currency pair is before you start trading. [If your trading platform has an “historical volatility” (“HV”) indicator, that will do too; just remember you want a “daily” reading – not an “hourly” reading.] “Day traders” might want to reduce their leverage ratios to 50:1 or lower. “Swing traders” or “trend traders” might want to downsize their leverage ratios to 20:1 or lower. Using a “trailing stop” may be more effective than a “fixed stop”.

 

 

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