EXPLANATIONS forexe

Market Overlap – Because the world is round, different places around the world experience different times. Half way around the world from somewhere where it is daytime is nighttime. This is obvious. Now there are three major markets that trade Forex, the North American market, the European market, and the Asian market (including Australia & New Zealand). The Asian market trades between 8pm and 4am EST (convert these times to your own time zone), the European market trades between 2am and 12pm EST, and the North American Market from 8am to 5pm EST. You will notice that there are two times when two of the major markets overlap in trading times; between 2am and 4am EST (Asian/European) and between 8am to 12pm EST (European/N. American). Generally speaking, those are the best times to trade, and all other times simply close your computer. Most significant price moves happen only during these times, and outside of these times the markets mostly “consolidate”, meaning very little price action happens, just some narrow bouncing sideways movement, and it’s usually a big waste of time trading then. CLOSE ALL ON FRIDAYS – DANGER! DANGER! This point is huge. Never, and I mean NEVER leave a trade open through the weekend. During the weekend the markets are closed, but world events still happen that affect the price of a currency pair. When the markets reopen on Monday morning (Asian times), Sunday evening in North America, the price usually gaps meaning your stops could be completely missed resulting in huge losses. So never ever ever leave a trade open through a weekend. If you have any open trades simply close them manually around noon or 1pm (EST) on Friday. Yes, following this advice may result in lost 

profit opportunities, but it far more than compensates for lost money in your account if you are on the wrong side of a big move. Overnight Interest – Remember, if you leave your open position over night then you are charged interest. Your brokerage should explain this in more detail for you. Remember that leaving overnight positions open on Wednesdays cost you triple interest. This is just a reminder about interest charges, however if you are in a profitable trade then this is negligible.