This article is about the most opportune time for range and breakout strategists to trade profitably in the foreign exchange trading market.
Every novice in the foreign exchange trading market thinks that there is one trading method that will allow them to make millions in as short a time period as possible. You cannot point to a single item that will allow you to do this. You should keep your eyes and ears open to the events in the market and what other traders are saying. An important factor is determining the most opportune time to trade and the best trading session to partake in. The strategies that you use may not be conducive to the time at which you are trading.
Your main downfall could be the time of day you enter the trading market. Many traders make use of the same forex strategy irrespective of the time of day they intend trading. This is unsuitable as a forex strategy that works in the morning may not be as effective during the evening trading hours. You should make use of different strategies at different times of the day. If your trading strategy has been proven to be consistent and solid, you should find out which the best time of day is to use it.
If you are a range strategist, you should use the economic news announcements favoured by fundamentalists. The difference between trend and range traders is that range traders should not be trading at the times when the news announcements have been released. You should bear in mind that when the range in the market has been broken, you could suffer losses as the conditions in the market will not be suitable for this type of strategy.
If you intend using breakout strategies, you have to wait for a motivation to trade. If there is a stimulant, it is possible for a breakout to occur. There must be movement in the market if you wish to continue trading. With these factors in mind, it is clear that the most opportune time to make use of this strategy would be during the time when economic announcements and data are released. The best times would be during the US and European announcements. News from these areas normally impacts the market much more and this pushes traders into the live market.
Foreign Exchange Trading Times
There are many analysts out there who have given up their time to collect information related to the best trading times in this market. The data that was collected was broken down to include the seven most commonly traded pairs – the majors.
This information indicated that the most opportune times to trade are usually from 13:00 to 17:00 GMT. During this time most American and European traders are actively trading. The main reason for these high levels of opportunity is that approximately 60% of all forex trades are undertaken during this particular period.
It is advisable for range strategists to cease trading during this time period. The best time for range strategists to trade is between 21:00 and 06:00 GMT. This is the time when there is more activity among Asian traders and there are usually very few high risk events during this period.
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