What is the Best Time to Trade Forex?

In the 24-hour Forex market, timing is critical. Choosing the best time to trade is a powerful way to maximize the profit potential of every trade. Professional traders know this secret. They carefully choose the timing of their trades to produce the most profits. You can make this same choice — and maximize your profits on every trade. In short, you can choose to trade the Power Hours. Let’s examine what gives the Power Hours their remarkable potency. This can be summarized in two words: volume and volatility.

What Are The Power Hours?The Power Hours are the times when volume and volatility rise to peak levels. High trading volume means that many lots of a particular currency pairs are being bought and sold.Sponsored LinksFree Forex Trend AnalysisAny Forex Pair, Anytime, Anywhere. Get a Free Trend Analysis Everyday.INO.comIndonesia FX Day TradingZero Commissions, Tight Spreads, Instant account opening & fundingwww.avafx.comOnline Derivative TradingBuy and Sell Derivative Options on Forex, Indices and Stock Marketswww.

Bet On Markets. comHigh volatility means that currency pair prices are moving fast and trending quickly.The combined force of high volume and strong volatility can cause large pip movements in nearly every major currency pair during the Power Hours. When Are The Power Hours?The Power Hours run from 8am to 12pm EST.Yes, the most active trading period lasts only four hours every day! This is the US-European overlap session, which is the time when the world’s two most active trading centers cross -- as the European session is closing and the US session is opening. It is a small, but very active, window that some currency traders call the “hot zone.” And many professional traders focus their best efforts on trading during those four powerful hours.

Which Currencies Should I Trade During the Power Hours?Look for the following currencies to make the largest pip movements during the Power Hours.* EUR/USD* USD/CHF* USD/CAD* GBP/JPY* GBP/CHF Are You Busy During The Power Hours?There are other trading times that can produce good results though usually not as dramatic as in the Power Hours. The European and the U.S. sessions can also show strong volume and volatility for trading. Remember, they are the world’s two largest trading centers so the trader can still find good price action.

The European SessionThe European session is headquartered in London. The large number of market participants has made London the world’s most volatile market for trading currencies. And it links with both the Asian and American sessions.Look at the GBP/JPY and the GBP/CHF for strong price movements as European assets are converted into dollar-denominated assets. These conversions can cause the currencies to make strong price movements.Be prepared to get up early (or stay up late) because the European session runs from 2am to 12pm EST. European Session Watch List:* GBP/CHF* GBP/JPY* USD/CHF* GBP/USD* USD/CAD The US SessionThe US session is headquartered in New York. The GBP/JPY and USD/CHF show high volume and volatility during this time since their transactions require US dollars. Trading during this session becomes even more active when the US stock and bond markets open because foreign investors need to convert their currencies into dollar-dominated assets. The GBP/CHF often makes strong price movements during this period.The US session runs from 8am to 5pm EST.US Session Watch List:* GBP/CHF* GBP/JPY* USD/CHF* GBP/USD* USD/CAD When Should I Avoid Trading?The least active time to trade -- dare we call it the “cold zone” -- is the European-Asian overlap session. Most traders are sleeping (or taking a nap) during this short period.

Trading volume is very thin and trends are unpredictable during this period. Stay out of the cold zone! However, this is a good time to get prepared for the opening of the European session.The cold zone runs from 2am to 4am EST.Remember, timing is a strong and important tool that action-seeking traders can use to find strong price movements. The Power Hours open a window for many trading opportunities. So, be prepared to trade like (and with) the professionals to make quick profits during these powerful hours.
This artcile originally by Robin Lofton

Lots of fear, not much greed: fear, not only for one's trading, but for retirement savings and the economy. Most of people's money is tied up in some combination of stocks, bonds, and residential real estate. That means that many, many people are worth 25+% less than they had been just a year or so ago.It is difficult to insulate those fears and concerns from one's trading. And yet, I do hear from traders who are making money in these markets. There *is* volatility, and there can be opportunity. Here are ten factors that stand out among the traders I talk with who are making money in the current environment

1) Patience - The ones who are afraid of missing moves, who chase moves as a result, are getting hurt. The ones who wait for clear signals and good reward-to-risk opportunities can take advantage of the volatility. The successful traders aren't afraid of missing a move; they know, in this volatile environment, other opportunities will arise.

2) Position Sizing - Trading smaller when markets are moving more means that one or two losing trades won't knock you out for the day or the week. The successful traders tell me they're making plenty of money with smaller size simply because we're moving triple digits in the Dow just about every day.

3) Resilience - When you're wrong in these markets, you can really be wrong. My first trade yesterday lost over 20 S&P points; I wound up the day solidly in the green. By managing risk, you also manage emotions and can stay in the game. The successful traders are in there, making trades. They get off the canvas when they're wrong and they play defense, even as they look for opportunity.

4) Minimizing Distractions - One thing I noticed is that the successful traders in this environment have taken active measures to protect their personal finances. The less successful ones have been distracted by losses they're incurring outside of trading. It is difficult to focus on trading if you're worried about unemployment or loss of savings; addressing personal security helps maximize focus during trading.

5) Self-Maintenance - It's easy to get run down following markets through the day, every day, and then tracking them overnight and overseas. One troubled trader told me he was living, eating, and breathing trading. That is a risk factor for burnout, lessened concentration, and bad decision making. The successful traders aren't afraid to step away from the screens; once again, they know opportunity is not going to go away.

I'm finding that execution is the better part of success in these times. If you have a good idea, but the timing of your entry is wrong or your position is too large, you're likely to get stopped out at the worst conceivable time. By waiting for markets to put in a seeming high or low, waiting for a bounce or pullback that can't make a new price extreme, and *then* getting into a position, you can minimize the heat you take on trades. That, I'm finding, is half the battle.

Several traders tripped up by the narrow, range market. After a period of volatility such as we had during the first quarter of 2008, it is understandable that traders expect moves to extend. In a range market, however, reversals of market moves are the order of the day.

If traders don't recognize the character of the day early, it's easy to get chopped up in those reversals. Here are several cues I rely upon in gauging a possible range day. Not all of these are present on all of the days, and not all of these pertain to yesterday. As a whole, however, I've found these to be relatively accurate guides that help me pull back my trading, enter trades only near range extremes, and take profits more quickly than I would in a trending market.
1) Other, related markets are range bound - If the interest rate markets are in a narrow range, there may be little reason for investors to reprice equities;

2) Little news - Either there is no news and no economic reports, or the news and reports that come out fail to move interest rates, currencies, etc. Per number one above, that means that the news has not significantly impacted investor expectations, and there's little reason to move value;

3) Decreased volume - Often this is a first signal: Volume either starts the day well below recent norms, or quickly tails off to below average as the day goes on. This means that the large institutional participants that move markets (and ultimately set value) are not active and trade will be dominated, in relative terms, by market makers;

4) Narrow breadth - When we get an initial market move for the morning, it occurs on narrow breadth, with advancing and declining issues relatively balanced. That tells us that the move is not a broad trend;

5) Sector rotation - When we get that initial market move in the morning, some sectors may be up quite a bit (energy, for instance) and some might be down quite a bit (financials). When sectors are taking their separate paths, there is no general trend to the market;

6) Initial trades don't work - A scratched trade often provides market information. If you catch an early market move and then it reverses on you before it hits an expectable price target, you have an early indication of the character of the day.

It's worth paying attention to good trade ideas that don't pay you out. The main thing is to not overtrade these narrow days. If a market is trading in a range, the best trades are to fade moves around the range extremes. Since moves tend not to extend, it's necessary to take profits more aggressively than you ordinarily would.As the VIX grinds to new lows and we get closer to possible summer doldrums, we may see an increasing number of these narrow days. If you can recognize them early, you can preserve your capital and maybe even make a little money.

There is one aspect that is considered as one of the best advantages of FOREX Trading. This is related to the amount of money you need to place a trade, this is known as "margin", and in short, this is all that can be lost in a the case you had a bad trade.

Futures markets are often prone to sudden and dramatic moves, against which you can not protect yourself, even by trading with protective stops. Your position may be liquidated at a loss, and you’ll be liable for any resulting deficit in the account. But because of the FX markets deep liquidity and 24-hour, continuous trading, dangerous trading gaps and limit moves are eliminated. Orders are executed quickly, without slippage or partial fills. And finally, there are no margin calls -- for your protection, ALL our recommended brokers will automatically close out some or all of your open positions if your account equity falls below the level required to hold the positions. Think of this as a final, automatic stop, always working on your behalf to prevent a debit balance. In fact, if you pick from our list of recommended brokers, we guarantee that you will never lose more than you have in your FOREX account.

If you want to find an appreciable number of profitable trades when trading Forex you need to enter the forex market at the best period of time. This means you should enter when the activity, the volume of transactions, is the highest. All experienced traders focus on the hours when the currency markets tend to make their biggest moves, i.e., during the big market overlaps, which therefore, are usually the best times to trade.
Forex markets are open worldwide with the following schedule:
* New York Market trade times: 8am-4pm EST
* London Market trade times: 2am-12Noon EST
* Great Britain Market trade times: 3am-11am EST
* Tokyo Market trade times: 8pm-4am EST
* Australia Market trade times: 7pm-3am ESTForex markets have also these timing characteristics:
* Forex Trading begins in New Zealand, followed by Australia, Asia, the Middle East, Europe, and America
* The US & UK account for more than 50% of the market transactions
* Forex Major markets: London, New York, Tokyo
* Nearly two-thirds of NY activity occurs in the morning hours while European markets are open.From this timing facts, it is evident that at any given time, somebody somewhere in the world is buying and selling currencies. As one market closes a different market opens. Business hours overlap, and the exchange continues as day becomes night and night becomes day.

The great liquidity of Forex, combined with the fact that's traded 5.5 days a week around the world, offers every trader an exceptional independence and choices to trade Forex when you want to and not when the market wants you to do it. It’s a facts that trades always develop with relatively the same frequency, regardless of time. As long as the Forex market is open, there is about the same probability that you will find a trade, whenever your look for it.

Forex market volume of transactions remains high during the whole day, but peaks highest when the Asian market(including Australia & New Zealand), the European market and the U.S. market are open simultaneously. And these are the best trading hours you must target in order to find the highest possible amount of profitable trades.During each trading day, the total Forex “volume” is determined by the number of markets that are open and the times each of these markets overlap one another.

If you want to find an appreciable number of profitable trades when trading Forex you need to enter the forex market at the best period of time. This means you should enter when the activity, the volume of transactions, is the highest. All experienced traders focus on the hours when the currency markets tend to make their biggest moves, i.e., during the big market overlaps, which therefore, are usually the best times to trade.

Forex markets are open worldwide with the following schedule:
* New York Market trade times: 8am-4pm EST
* London Market trade times: 2am-12Noon EST
* Great Britain Market trade times: 3am-11am EST
* Tokyo Market trade times: 8pm-4am EST
* Australia Market trade times: 7pm-3am ESTForex markets have also these timing characteristics:
* Forex Trading begins in New Zealand, followed by Australia, Asia, the Middle East, Europe, and America
* The US & UK account for more than 50% of the market transactions
* Forex Major markets: London, New York, Tokyo
* Nearly two-thirds of NY activity occurs in the morning hours while European markets are open.

From this timing facts, it is evident that at any given time, somebody somewhere in the world is buying and selling currencies. As one market closes a different market opens. Business hours overlap, and the exchange continues as day becomes night and night becomes day.

The great liquidity of Forex, combined with the fact that's traded 5.5 days a week around the world, offers every trader an exceptional independence and choices to trade Forex when you want to and not when the market wants you to do it. It’s a facts that trades always develop with relatively the same frequency, regardless of time. As long as the Forex market is open, there is about the same probability that you will find a trade, whenever your look for it.

Forex market volume of transactions remains high during the whole day, but peaks highest when the Asian market(including Australia & New Zealand), the European market and the U.S. market are open simultaneously. And these are the best trading hours you must target in order to find the highest possible amount of profitable trades.

There is one aspect that is considered as one of the best advantages of FOREX Trading. This is related to the amount of money you need to place a trade, this is known as "margin", and in short, this is all that can be lost in a the case you had a bad trade.

I state it like this because, even though I know with proper self-taught education you're NOT going to lose as much as you win anyway, I want you to know that despite the super-high leverage associated with FOREX trading (200:1 is possible; meaning that if you put up $1 the trading vendor will allow you to trade like you really have $200), it's still arguably less risky than futures (commodities) trading. And, forget stocks, you'll never get this type of LEVERAGE in the equities market.

Futures markets are often prone to sudden and dramatic moves, against which you can not protect yourself, even by trading with protective stops. Your position may be liquidated at a loss, and you’ll be liable for any resulting deficit in the account. But because of the FX markets deep liquidity and 24-hour, continuous trading, dangerous trading gaps and limit moves are eliminated. Orders are executed quickly, without slippage or partial fills. And finally, there are no margin calls -- for your protection, ALL our recommended brokers will automatically close out some or all of your open positions if your account equity falls below the level required to hold the positions. Think of this as a final, automatic stop, always working on your behalf to prevent a debit balance. In fact, if you pick from our list of recommended brokers, we guarantee that you will never lose more than you have in your FOREX account.

I spent some time over the weekend scanning through the Fortune 100 Fastest Growing Companies for 2007 for companies that interest me. I would look at the company’s business, recent sales and earnings, and future earnings projections. No calculator, just an eyeball on growth rates vs. PE. It was interesting, since the list was compiled in mid 2007, how many companies on the list had had recent earnings set backs. While going through the list I noted some personal likes and dislikes of company attributes that cause me to look favorably or unfavorably on a stock.

Some of my dislikes:

* Companies that have business selling to other companies. There is something about a company that is reliant on another company or industry to manufacture good products and sell them profitability that I avoid. Even if the company is the best around and well run, bad economics or management by their customers can seriously affect the suppliers bottom line.

* Faddish retail companies. Clothing lines, beverages and restaurants. These can all lose ground to the next hot item if they do not come up with the next hot item themselves.

* I have a tendency to avoid all health care and pharmaceuticals. Although health care sucks up a huge portion of the U.S. GDP, I just feel the whole thing is propped up by ever increasing costs that will someday collapse. I am probably entirely paranoid here, but I do not invest in this area.

* Fast growing companies with no earnings set off warning bells in my head. It is my belief that it is easier for a company with hot products or in a hot sector to grow revenues than earnings. A hot company has to start bringing significant dollars to the bottom line before I get interested.Some of my preferences:

* I gravitate to companies with market capitalization between $500 million and $2 billion, plus or minus. I believe companies this size are big enough to have established themselves, but too small for most of Wall Street to have found. Often they have between 1 and 4 analysts following them and good information is hard to find. Maybe I can find a nugget of news that shows me the market has miss-valued the stock.

* I like industries with products people and business must have: Energy, transport, gambling, banking., infrastructure. Well run companies in these business can often count on a certain built in customer base and work to maintain or improve margins.

* I get interested in a company that has a business or niche I have not previously heard of. This might be a company that has carved out a profitable niche by offering a unique product or service.

I will read deeper to see if there is more to get interested in.Once I find a company of interest I usually add it to my Watch List. At some point I will come back to it and dig deeper into finances and their story. It may be the next day or weeks down the road. Right now energy companies are hot and anything to do with home construction is not. I have some of both on the Watch List to get back to as market conditions change. When I review deeper I may keep a stock on the list, remove it because I do not find a compelling reason to keep monitoring it, or move it to one of the portfolios I track here. One thing I try to keep in mind is that prospects change for companies, sectors and markets and it is important to keep options open.by Tim Plaehn, published at www.gracecheng.com