It’s time to sharpen the forexrazor and make yourself an FX investing member and collect all the Software/Technical tools you can find and put them to work. We are trying to approach trading from a technical standpoint.
Forex Market Hours
The forex market is traded in the best time zone of the worlds four currency’s. The first up Starting on Sunday at 8PM EST time Sydney session, the Tokyo session open. Then next around 3AM-4AM the London session, and European sessions come to life. AND Finally the biggest and baddest of them all New York session starts at 8AM but the stock market actually opens at 9:3AM
Below are tables of the open and close times for each session:
The best time to trade a particular pair is during the most volatile times of day, during announcements and the session crosses, when both the pairs markets are open like the GBP/USD. (pictured above). Volatility tends to die down in the middle of the session, around lunch time and picks back up again when the New York US market opens.
Which Pairs Should You Trade?
The U.S. dollar serves as the de facto universal medium of exchange aka world’s primary reserve currency. So since the USD is the de facto/standard it will be used in all following pairs. So the answer is whichever of the three time zone fits your schedule.
|EUR/USD||The EURO is the worlds second largest currency and is the main currency for 16 countries.|
|GBP/USD||Pound is the world’s fourth most-traded currency, appearing in about 6% of all forex transactions.|
|USD/JPY||Japan is know as the world’s money lender and also as the third largest economy.|
How to Make Money Trading Forex
It’s simple all you need to do is collect PIPs… but what is a PIP? In the foreign exchange markets, a percentage in point (pip) is a unit of change in an exchange rate of a currency pair. A pip is normally the forth digit after the decimal in a currency pair. Currency pairs are typically traded in lot sizes of 100,000 units of the base currency.
In the example JPY/USD, the JPY is the base currency and the USD and the quote currency. Dividing the two currency rates together give you the price. When US Dollar is the base currency value = positive when dollar is quote currency value is negative.
When to BUY (Long) or SELL (Short)?
Now this is the part where all your tools are going to come in handy.
First you will want to know what financial data is going to be released that day, then start researching. While doing your research tailor your findings to what the experts are saying and what they think should happen so can make a calculated choice on whether you should long or short the pair. You will need a FX calender and technical data for that:
Here is a little more cheat sheets for the tech data:
You need to be sure of your choice to long or short the pair because you have 50/1 odds on the riding on this estimated guess. Once you are ready, buy your pair and wait for the pips to roll in. I think that as a beginner you should not shoot for money the 20-30 pips daily you will risk you earning. Remember just collect your 5% daily and be happy!