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We will try to understand the basic concepts behind using ANALYZE to trade foreign exchange markets. We’ll start with the “basic principles of technical analysis,” skip “the best time to trade 24-hours market, and then study two technical analysis tools that are very effective in this volatile market trade” Candlestick Charts “and” Divergence “.

Best times to trade the FOREX market

The forex market is the largest financial market in the world trade around $ 3.1 billion every day. (Every three years, the Bank for International Settlements (BIS) survey of major Forex market participants and then creates a volume estimate based on information collected.) Recent survey by the BIS in 2007 gave the estimated number $ 3.1 trillion. (This figure represents a volume increase of almost 70% from the 2004 survey.) Market is open 24 hours a day from 5PM EST Sunday to 4pm EST on Friday. Thus, the single market in FX any other market in the world, that trade is available 24 hours a day.

Some interesting facts

According to the BIS, $ 3.2 trillion average daily volume is equivalent to: More than 10 times the average daily turnover in global equity markets. The average daily turnover in global stock markets is about $ 280 billion (Source: World Federation of Exchanges aggregate 2006) More than 35 times the average daily turnover of the NYSE. The average daily turnover of the NYSE is about $ 87 billion (Source: World Federation of Exchanges aggregate 2006) More than 10 times world GDP. Global GDP is about $ 48 trillion (Source: World Bank)

Trading Areas

Somewhere in the world financial center is open for business where banks and other institutions to exchange currencies, every hour, day or night, usually with only a few gaps on the weekend. Essentially foreign exchange markets follow the sun around the world, giving traders the flexibility of determining their trading day. The Forex market can be divided into three main regions: Australasia, Europe and North America. In each of these areas, there are several major financial centers. For example, Europe is composed of major centers like London, Paris, Frankfurt and Zurich. Daily Forex Trading begins with the opening of the Australasian region, followed by Europe and North America. As one of the markets in the region close to another opens, or has already opened, and continues to trade in the FOREX market.

Forex volatility

Since the Forex market is very dynamic with lots of price changes in one minute, it enables operators to enter the market several times a day and get some benefit from many of these trades. The 24-hour market does not necessarily continuous in the volatility of currencies. Most new traders often misinterpret the fact that this market can be exchanged at any time during the working hours of the week. Although there is always a precise movement, traders ideally need an environment of volatility may not be present at all time periods. If you want to find an appreciable number of profitable operations you need to enter the Forex market at the best time is to say, when the activity, the volume of transactions, is the most high.

Characteristics of the Forex market.

Forex is 24 hour market. It starts from Sunday 5PM EST to Friday 4pm EST.
Forex Trading begins in New Zealand, followed by Australia, Asia, Middle East, Europe and America.

The United States and United Kingdom account for over 50% of market transactions.
During each day, the total volume of exchange is determined by the number of markets that are open and times of each of these markets overlap one another.

Trading volume by location

(Source: BIS Triennial Survey 2007)
You can see why London is considered the world capital of foreign exchange trading. It has the largest turnover since it is home to many large banks and funds that are actors in the world of currencies.

Calendar of key market areas

New York Market trade times: 8am-4pm EST EUROPE commerce market times: 2:00 pm EST-12 Tokyo Market trade times: 8pm-4am EST
Overlapping areas of commerce
Forex trading activity is higher when the major markets overlap. Currencies tend to be more active when markets overlap. U.S. / Europe Overlap: 8 am – 12 pm (New York) Europe / Asia Overlap: 2 pm – 4 pm (New York)

Major market areas

Great Forex market areas – Asia, Europe and the United States. (Tokyo, London and New York) In each of these areas, there are several major financial centers. For example, Asia is composed of large centers such as Australia, Tokyo, Hong Kong, Singapore etc. Let us take another look at the major retail markets
Asian region. (Tokyo trading session – 8.00pm to 4:00 (EST)
Tokyo is the first major market to open, and many large participants often use the dynamics of trade there as a benchmark for assessing the dynamics of the market and develop their trading strategies.

The operations of Tokyo can be thin from time to time, major investment banks and hedge funds are known to use the session to Asia important to start and stop option barrier levels.

Asian region. (Tokyo trading session – 8.00pm to 4:00 (EST)
In this session, USD / JPY, AUD / USD, NZD / USD and their crosses have good potential as liquidity remains strong and the momentum of the last session of the United States in relation to the lighter Asian session. But the main activity and liquidity is concentrated mainly in the British pound-based currency pair – GBP / JPY and GBP / CHF. There are usually many opportunities in trade of these pairs after 8pm EST open. The USDJPY, GBPJPY and GBPCHF are good pairs of commerce, to provide a wide range of short-term traders with lucrative profit potential, using App. 90 pips. The GBPUSD USDCHF and are also good choices because of their moderate volatility because they help protect the operators of irregular market because of intra-day speculative trading. But the euro based pairs (EURCHF, EURUSD and EURGBP) should be avoided until the London session as traders anticipate the European Open.

European Zone. (London Negotiating Session – 2:00 to 12:00 (EST)
London is the largest and most important dealing center in the world with a market share of at least 30% and a volume of around 580 billion dollars. Most of the offices dealing with large banks are located in London. Most large foreign exchange transactions are carried out during London hours is due to market liquidity and efficiency. The large number of market participants and transaction value is highest in London is the most volatile among all the FX market. Traditionally a market more volatile, the London session is a good opportunity to transact in various GBP and EUR based currency pairs. Currency pairs as GBPCHF, GBPJPY and GBPUSD this favorable business opportunities. The USDCHF, USDCAD, EURUSD pair and also have a lot of activity. But the volume of the JPY pairs of decline founded shortly after the end of the period of overlap, and should not be considered for the momentum trades.

Zone United States. (New York trading session – 8:00 to 5.00pm (EST)
New York is the second largest market in FX, with approximately 16% of market volume. New York, trading is very liquid. In the U.S. market, most transactions are made between 8 am and 12:00 pm, when the European traders are still active. Trading often becomes hectic afternoon, however, that the liquidity dry. Thus, operators tend to pay less attention to market development in the afternoon. NY is very influenced by the U.S. bond markets and equity and pairs often move almost in tandem with the capital markets.

Zone United States. (New York trading session – 8:00 to 5.00pm (EST)

With the most opportunities, the New York session has activity and liquidity in USDCHF, GBPUSD, USDCAD and EURUSD and then most pairs in dollars. In addition GBPCHF and GBPJPY momentum beyond the previous session and includes a good percentage in New York. But EURGBP EURCHF and should be avoided, as well as liquidity dissipates during the meeting and did not revive until the opening of London. The thin market and the causes of fluctuations are not favorable to the profit applicant.

Know your currency

A trader will have an advantage, if it is aware of the average range Pip at certain times. The average daily range of currencies. The magnitude of currency movements covering 24 hours a day every day (through the three major areas of commerce). The day and time that the currency is expected to have high volatility. The daily volume figures of different currencies.

Active days and hours

GBP / USD 31% of developments occur on Thursday, 39% of the 0500-0900 trend occur between East EURUSD 64% of developments occur on Thursday and Friday 35% of trends occur between IS 0500-1300 USD / CHF 45% From evolution to occur on Thursday and Friday 61% trends occur between 0500-1300 IS USD / JPY 41% of developments occur on Wednesday and Thursday of the 51% trends occur between 0500-1300 EST GBP / JPY 49% of trends occur on Wednesday and Thursday from 31% trends occur between 0100-1300 EST

Qotidien medium range

EUR / USD GBP / USD USD / CHF USD / JPY 111 pips 156 pips 127 pips 102 pips AUD / USD NZD / USD GBP / JPY GBP / CHF 85 pips 81 pips 172 pips 161 pips
Conclusion
Forex market transaction volume is high throughout the day, but peaks highest when the Asian market (including Australia and New Zealand), the European market and U.S. market are open simultaneously. In particular, there is twice in two major markets overlap during trading hours – between 2:00 and 4:00 EST (Asia / Europe) and from 8am to 12pm EST (European / N. American). If you want to find a large number of profitable trades, focus on the hours when the markets tend to make their biggest moves, that is to say, in these big markets overlaps, which therefore, are generally the best times to trade.

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