HOW CRUCIAL IS TIME AND TIMING IN FOREX TRADING? The pros don’t want you to know this!

Introduction
This article if not about HOW to trade, but focuses on the WHEN of trading – its about time and timing. I have researched this information about Forex trading to enable you answer for yourselves the question “Does it matter WHEN I trade?” While you can make money whether the market is moving up or down, it’s extremely difficult to make money when the market is moving sideways.

Therefore, given that the market for a particular currency may spend 60% to 75% of its time moving sideways, it is very important to know when the TRENDING activity is MOST likely to occur.

This Two-part article (I & II) reveals the habits of Five major currency pairs in the 4Hour time-frame.

This article seeks to help you make the odds even.
How?
Imagine,that having access to this information will stack the odds in your favor. But, pause for a moment, and think that for each currency pair you already knew you will now know:
  • Forex market busiest 14 Hours (and for what use is this information?)
  • When trends are most likely to occur
  • The best days to trade
  • The best hours to trade
  • The most active trading days
  • The most active trading hours of the day
  • How far price is likely to move during a trend
  • How much of that move you can reasonably expect to capture
  • How long a tend is likely to last

PART I SECTION


DOES IT MATTER WHEN YOU TRADE?

Ironically, traders around the world spend a lot of time and money trying to figure out HOW to trade and expend enormous amount of their resources on systems, methodologies, strategies and techniques, but all too often it will ultimately give them half of what they need. These strategies are in themselves good, however, it is like someone trading with a shotgun, armed with only a part of the knowledge he needs and what he doesn’t know about WHEN is robbing him of his profits.

Consider these three familiar scenarios:
  1. It is easy to enter the market at the tail end of a trend and not know that the end was so near. Two bars left, your trade is heading south in a hurry.
  2. Given the day of the week and the hour of the day a trend first began, how do you know how many bars a trend is likely to last before a retracement or consolidation period? Even when all your indicators are still telling you the trend is going strong.
  3. Exiting too late on trade. You put a trade, you make 90pips, it drops to 60pips, so rather than tighten your stop loss to break even in the hope of a rally,you exit the trade at the market for a 25pips gain. That is better than nothing, but if you had known how many pips this currency pair was likely to move given the day of the week and the hour of the day the trend begun, you could have set a target to exit with an 85-pip profit.

Let’s See What Makes For The 24-Hour Forex Market


Technically speaking, the Forex market operates on a global time scale, twenty-four hours a day, seven days a week, with no start time and end time. Given that no one stays awake 24-hours a day and that very little trading takes place on the weekend (from Friday 13.00PM US EST to Sunday at 17.00PM US EST), the Forex trading day naturally breaks itself down into three major trading sessions:
  1. The Australian Session (New Zealand, Australia and Tokyo)
  2. The London Session, and
  3. The new York Session
Please PRINT this chart and keep beside you as you trade.


First thing you probably noticed is that from the New Zealand open to the New York close, the entire 24-hour is covered. Whats more, you can see that the Australian open has three markets open at the same time, with the last hours of the Australian and Tokyo sessions (3.00 to 4.00AM US EST) coinciding with the opening hour of the London Session.

Furthermore, the London and New York markets share the hours between 8.00AM US EST to 13.00 US EST. In other words, from 19.00 US EST to 4.00 US EST and from 8.00AM US EST to 13.00PM US EST, two or more markets overlap. Infact the yellow highlighted areas on the above table shows the Forex market busiest fourteen hours.

Discover when are trends most likely to occur within the Forex trading day on a 4-hour bars?

NOTE: What you are about to read will blow your mind and this is what the professionals does not want you to discover.

The next part (Part II) will present key trending information on GBP/USD, GBP/JPY, USD/JPY, USD/CHF and EUR/USD for a 4-hour bars. This part will be very long with live charts display examples, so I ask you to endure and complete the reading. I assure you, that you cannot avoid the urge to print out and keep this piece of knowledge. All the times will be expressed in US EST(Eastern Time).

You are probably asking, why the 4-hours bars?
Basically for those making the transition from end-of-day trading, this time-frame is easier to trade because
  1. It offers the advantages of intraday trading, without your having to be glued to your computer for a long periods of time;
  2. It filters out most of the “noise” found in lower time frame.

However, since the each currency pairs has its own idiosyncrasies and differs from each other as to when and how often trend will occur, we shall explain not only how often trades started on a given day, but also which day of the week is the most active.

Let’s begin with the ever-popular GBP/USD christened the “workforce” of currency pairs.

From the data sheet above, 96% of trends for this pair occur between Monday through Friday, with 15% starting on Monday, 19% on Tuesday, 13% on Wednesday, 31% on Thursday and 18% on Friday.

How does this information sheet help you?

It means that the day’s most likely to produce trends are pretty evenly distributed throughout the week, with the exception of Sundays and Fridays. While everyday average is almost parallel, Sunday is three or four times lower, but it shows that Thursday is the most active trend-producing day of the week for GBP/USD currency pair.

Now you have known the likely trend producing days for the GBP/USD, is would be good to know the optimal trading hours within those days. Lookout for part two.

What you will know in PART II will blow your mind.

Summary of what we have learned so far:
  1. Forex Market busiest hours (Trade overlap period from 19.00 PM to 3.00 AM US EST and 8.00AM to 12.00PM US EST)
  2. For GBP/USD, Monday through Thursday are the optimal trading days of the week
  3. Thursday is GBP/USD most active day
Part TWO will be coming next week
WISHING YOU ALL PROFITABLE TRADES

I am your fellow loyal Community Associate... JAMES
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