When to trade and when not to trade is something that every trader should be aware of. The forex market hours operate throughout the business hours of four distinct time zones around the world. Many newcomers keep an eye on several economic calendars and trade actively on every data release, seeing the 24-hour, five-day-a-week market as a simple way to trade all day. This technique could not only swiftly destroy a trader’s funds, but it could also wear out even the most tenacious trader.
Not every hour of the day is ideal for forex trading. The ideal time to trade is when the market is most active. There will be an enhanced trading atmosphere when more than one of the four markets is open at the same time, which implies there will be more dramatic movement in currency pairs.
The optimum time to trade is when the open markets’ trading times overlap. Overlaps result in higher price ranges, which means more possibilities. For example, the U.S./London markets have the most overlap. Because the US dollar and the euro (EUR) are the two most prominent currencies to trade, more than 70% of all trades occur when these markets collide. Considering volatility, this could be the right opportunity to trade.
A major news event can boost a typically dull market session. Currency can gain or lose value in a split second when a significant revelation about economic data is made, particularly when it contradicts the forecast. Despite the fact that hundreds of economic releases occur daily in all time zones and affect all currencies, a trader does not have to be informed of them all. It’s critical to distinguish between the forex news that must be observed and those that should be observed when it comes to news announcements.
Traders who want to try to increase their profits could try to trade at more turbulent times while keeping an eye on new economic data. They can use this balance to create a schedule that provides them tranquility, aware that possible opportunities will not be lost if they take their eyes off the markets.
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