Beginners

Avoid these times to make more profit in forex

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Trading high-volume periods can certainly help with getting the most profits from the market, but which times should be avoided? This is as much a relevant question as asking which times are the best to trade forex.

In my experience, here are 5 times that can increase the risk of losing on trades, under normal trading circumstances, using a “normal” trading system:

  • Market openings: When markets open, participants generally digest relevant information that might have an impact on currency pairs. Critical economic and social news have a massive bearing on the four major currency pairs. As such, the first hour of a market opening should be avoided until the market settles and a clearer sentiment can be established.
  • Public holidays: Avoid trading markets when there is a public holiday in one of the four major markets. The market is less efficient as all participants are not present in the market.
  • Friday afternoons: This sound silly, but do not try and squeeze a quick deal from the market on a Friday afternoon. These trades are generally emotionally driven and lead to rash decisions. Avoid!
  • Economic data releases: When crucial economic data is released (such is US unemployment statistics, known as non-farm payroll data), the markets can have massive knee-jerk reactions. A lot of money can be made or (even worse) lost during these short sessions. These data releases are times better avoided if you follow a strategy of making consistent profits.
  • Gap risks: Gaps can occur under many circumstances, but mostly relate to the conditions above, where the price movement is “gapped”, i.e. price action from one period to the next is big and no trades occur in between. The risk is that your stop-loss will not even be triggered if a gap occurs against your trading direction.

My advice is to avoid “high-risk” trading times and stick to one of the sessions that are considered to be the best time to trade forex. You only want profits as a forex trader, but this means you should use a proper trading system. A proper system has capital preservation as one of its key cornerstones – if you want to trade high-risk times, better go to a casino as there are no guarantees. Unless you are professional trader and have appropriate systems to cater for these conditions.

We thoroughly test many forex systems at FXTradingReviews com and give our honest, unbiased review comments.

Source: Free Articles from ArticlesFactory.com

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