When we observe the trend of trades, we see that timing is of essence to the success of a trade. Many traders have faced major losses in a trade due wrong timing. They have traded currency pairs at times when the price charts are against them.
Study the Markets
It is a fact that not all hours of the day are suitable for trading. When the market is most active and when there is least fluctuation in the market, it is the safest to open a trade. When more than one market is open, then there is greater fluctuation in price movements. It can be more than 70 pips north. However, when only one market is open, the price gets locked into a static zone with a change of around the 30 pip range. Moreover, you need to study the New York Stock exchange (NYSE) because the US dollar is involved in 90 percent of all trades and it is the biggest trading platform in the world. You also need to have an in depth knowledge of the market you are going to trade in before making a trade or you’re just handing your fate to luck and that isn’t what experienced traders do.
Overlap timing
When the markets overlap then there is an equal chance of greater risks and profits. As mentioned earlier the markets move significantly when more than one market is open. The biggest overlap in the US/ London markets occurs from 8 am to noon and as we know that the dollar and euro are the hottest currencies to trade and this is the optimal time when the volatility is really touching the roofs , this would be the time to start a trade. The 2am to 4am time in the Sydney and Tokyo market overlap isn’t as volatile as the above market but it still gives you a higher pip fluctuation and greater opportunity in the market. The London Tokyo overlap which happens between the 3am to 4 am mark sees the least volatility in the market and lower opportunities as compared to the above two markets.
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