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As a newbie, I get lots of advice from my online trading pals. One of the biggest topics seems to be when NOT to trade. That Forex is a 24-hour market seems not to matter. Somebody always wants me to get up earlier, stay up later, or avoid 400 different reversal times throughout the trading day.
A new suggestion is that no trading should take place between 22:00 GMT to 0:700 GMT (basically that's no trading from the open of Australia to the opening of London). I confess to not entirely understanding his thought process. I think this guy is probably a genius, and that combined with a language barrier and the limitations of the chat process, leaves me a bit confused sometimes.
Now I'm asking this group two questions:
Do you forex traders have times of day that you just don't trade?
And what do you think of not trading the Australia and Asia sessions?
I am a newbie like you but I have been advised that the best place to trade is the daily charts and the best thing to do is to wait for daily session to close. Apparently the intraday game is too fast and too volatile for newbies to handle so at first it is best to play the easy game.
That is the time when I make all my decisions and enter my pending orders. According to experts that time is when the market has the least volume so it is not moving and if it is moving it is easy to be manipulated. Also many market makers increase their spreads at that time. I think it is because they want to fight scalping from EAs.
This is what I know so far. Maybe someone else can give us more information.
Usually you want to trade when volatility picks up. I have started a whole thread on this subject and developed an indicator, which allows to monitor intraday seasonality:
Each instrument has its specific times, when it can be traded, and also has its times, when trading does not pay off. The question is. how to determine the optimal trading times?
The main criterion is volatility. If volatility …
The indicator to monitor volume and volatility can be downloaded here:
Exported using NT Version 7.0.0.25
The download file contains two indicators which can be used to explore the average range and volume of any intraday time period over a selected lookback period. The average takes into account the day of the week. …
Unfortunately, this will not work on MetaTrader 4.
I don't think have enough experience to even say I have a style. Perhaps some circular logic applies here: will my style determine the time of day, or will the time of day I can trade determine my trading style?
Ok well I am going to put in my two cents and it probably wont be a short response (lol). So first off, advice is great but everyone has their own opinion. You need to watch and develop your own thoughts, opinions, and gut feelings on the market in order to really begin to trade. What works for JoeSchmo A wont work for JoeSchmo B.
Now onto the actual trading. I personally live in California and really have no intention of ever trading during the London hours. Now I trade two different ways, 1h charts, and 5 min charts. For the 1 hour charts I check in whenever I can to see if anything has moved and started to show signs of a trend either long or short. For 5 minute charts I trade when I can, and my pet pairing is AUD/USD and NZD/USD during the asian hours. I personally trade 90% of my 5 minute chart trades during the Asian session. Now a wise trader once told me, would you rather go for 100 pips a day trading $1 a pip or for for 1 pip a day trading $100 a pip.
I bet you can guess which one is easier, and yes thats a drastic statement but it makes sense. For asian sessions I double my amt per pip and look for only 5 pips. So far this has worked out great.. (BTW my daily target on 5 minutes is only 5 pips).
Now for your two actual questions:
Do you forex traders have times of day that you just don't trade?
Yes I don't trade the London session purely because I am sleeping. I do not change my sleeping habits for FOREX.
And what do you think of not trading the Australia and Asia sessions?
Answered above
I did create a patch in my trading system to allow me to backtest for the best hours for entry and follow up. I realised that the best result was from 08:30 pm to 02:30 pm New-York time for my system. I also included the Hollydays, where, i dont trade until 08:30 pm
So basiquely after the asian opening until the end of the trading day in New-York.