Managing your time

Beginner forex traders frequently become fixated on trading in what is a 24-hour, five-day-a-week foreign currency market. But trying to keep up with forex markets operating in different time zones can quickly become exhausting and impede forex trading successfully. To reduce the risk of overtrading or losing trades, rest is essential. Traders must also know when to enter or exit a trade, i.e., at what time and on what days.

When should you trade?

• Start trading when two sessions overlap. This is when important economic data is usually released which may cause volatility and directional changes.

• Begin your trading with the London session. It has the most trades overall, followed by slightly less activity in Sydney and Tokyo. 

• Most of the main currency pairs’ pip ranges broaden around the middle of the week, which normally sees the most volatility.

• Pay attention to opening and closing times. The trading week starts from Sunday 5 p.m. EST until Friday 5 p.m. The most beneficial time to trade is when the market is very active. When two or more markets are active simultaneously, the result is often a greater variation in currency pairs. Use a Forex Market Time Zone Converter to see which trading session(s) are active during your local time zone.

When not to trade

• During important news events: you may find the way you trade inadvertently swayed.

• On Sundays and during the holidays when everyone is usually away or relaxing.

• On Fridays when liquidity declines toward the end of the American session.

So, what are the most popular markets for forex trading and when are they open?

The 4 biggest forex markets worldwide

런던

London is the largest currency trading market. It accounts for almost 43% of all global commerce according to a BIS estimate and is where currency trends typically originate. London massively influences currency fluctuations because it’s home to the Bank of England which oversees the monetary policy of the pound and determines interest rates. The London session usually begins at 3 a.m. and ends at 4 p.m.

뉴욕

Open from 8 a.m. to 5 p.m., the New York market is the second-largest Forex marketplace globally. It is closely monitored by international investors being that 90% of all trades involve the U.S. dollar. The value of the dollar is also strongly impacted by changes in the New York Stock Exchange (NYSE).

도쿄

The first commercial hub in Asia, Tokyo is where most commercial activity happens, followed by Hong Kong and Singapore. GBP/JPY, USD/JPY, and USD/JPY are generally the most traded forex pairs. The Bank of Japan (Japan’s Central Bank) has significant impact on the USD/JPY currency pair when only the Tokyo market is open, which is from 7 p.m. to 4 a.m.

시드니

The trading day in Sydney begins at 5 p.m. to 2 a.m. Although the smallest of the markets, Sydney sees a lot of activity when markets re-open on Sunday afternoon as individual traders and financial institutions regroup after the lengthy break from Friday afternoon.

고지 사항: This information is not considered investment advice or an investment recommendation but a marketing communication. IronFX is not responsible for any data or information provided by third parties referenced or hyperlinked, in this communication.

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How to Read the Forex Market

Market Analysis refers to both Fundamental and Technical Analysis. Most traders believe that Market Analysis is just Technical Analysis while the latter only refers to looking at the charts and various indicators which are helpful in assessing the market instead of prices as such.

Fundamental analysis includes analysing central banks’ decisions and monetary policy and economic data as well as understanding them. Unfortunately, many traders are not aware of these, so they usually skip them. This is the main reason behind a possible failure and the reason why trading is not successful for them in the long-term.

기본적 분석

The most important thing to know about Fundamental is analysis is that how currencies will move will completely be determined by the Fundamentals. There are three major components to fundamental analysis: Central Banks, Economic Data & Geopolitical events. You should closely look at the first two, which can be quantified, while the third is almost immeasurable and even random sometimes.

• Central Banks are the starting point. Their policy targets and protocols are pretty clear to follow. Therefore, speculating on what they might do or say and when they are going to say or do it is very easy. Their main responsibility is to apply Monetary Policy, which is based on the clear measure of Inflation and Employment.
• There are 3/4 key Economic Data the Central Banks focus on very closely. If something changes regarding this data it means that the market will change too because there might be a shift in interest rates should the numbers be consistently strong or weak.
• Events like Geopolitics are random and usually avoided rather than traded. They usually cause confusion and change the natural flow of currencies.

All you need to know is that banks are the market, controlling over 90% of the volume. Entering and exiting the market using trendlines. Once you have a clear understanding of this you shouldn’t worry about anything else.

기술적 분석

The technical charts are the means to providing a clear picture of where the currency pairs are moving. Technical Analysis is an extremely important part of Market Analysis because it clearly illustrates where to enter and exit the market. It also shows any possible trends currently available in the market. If it has been a while since you were last active, you can take a look at your charts and find out if it is in an uptrend or downtrend.

All you need to know is that banks are the market, controlling over 90% of the volume. Entering and exiting the market using trendlines. Once you have a clear understanding of this you shouldn’t worry about anything else.

Professional Market Analysis

When analysing the market you need to pay particular attention to both sides of the market. Bringing Fundamental and Technical Analysis together would be ideal. Isolating direction and entry levels will also improve your trading potential. 3 major things to ‘analyse’:

• Central Bank News and Sentiment
• Key Economic Data Release and Market Sentiment
• Technical charts and Overall Sentiment

고지 사항:

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