Hi, can you run down the list of peak hours for the main currencies? Also please explain why it is important to trade during peak hours. Thanks a million.

Hi,

London is the center of the forex world so the most active trading session for the main currency pairs is the London Session. The hours for the London session run from 2am to 10am EST. As the US Market begins at 8am EST and as much economic data for the US Dollar (by far the most actively traded currency) is released between 8am and 10 am these two hours are the most active of the London session on average.

People who would argue that it is important to trade during the peak hours of the market would say this because this is when the most volatility is, and therefore the most opportunity for day trading profits.

If a trader is not a day trader however, or is newer to the market and prefers less volatile trading conditions, then in my opinion there is no reason to trade during these hours.

If you would like to provide me with a little more info on what you are looking to do with your trading in forex I would be happy to discuss my opinion on what market hours would best suite your style in greater detail.

Hope that helps. Please let me know if there are any other questions or comments.

Best Regards,
Dave

Hi David, I am the original postee of this question. I have never traded forex and have a backround in Daytrading/scalping stocks. So I am basing what I would want to look for in the forex market on what I want to look for in the stock market. Maybe transposing favorable conditions from stocks to forex is my first mistake, but I will go ahead anyway. I look for very high volume stocks(usually RIMM or AAPL) to trade countertrend. I find the amateurs who bid the price to an area where it should not be(right into support or resistance) and I trade against them. This is all based on the working assumption that no one who understands the governing dynamics of supply and demand would buy or sell in these areas with the exception of the less informed. I find very high probability set ups with this method on a consistent basis. I am happy with my methodology and do not wish to change. I am mostly just curious about the forex market and am always open for new opportunities. That's why I have been running through your Free course on forex, which is great by the way. In summary, I am a daytrader now, but I don't wish to carry over any methodology or style to another instrument if it simply wouldn't be beneficial to do so. Another thing I have noticed already since I've opened my demo account with FXCM is that it seems forex traders have a bias towards momentum. Well, atleast by looking at all of the charts I can tell that there seems to be a substantial amount of rallies through resistance and declines through support. I only trade the way I do with stocks because the market told me I could make money that way. I do understand the importance of trading a methodology that is cohesive to my own personality, but I also know that the forex market is what it is, and I have to adjust myself to find a way to make money in it. What are your thoughts on this?

Hi Shootanappleoffmyhead,

First off I would like to commend you on how you are looking at the possibility of trading Forex. I think that this offers a good lesson for everyone on how to look at a market and be flexible without changing your overall belief system.

As I used to work for a forex trading firm I had the ability to see lots of retail order flow and how the individual speculator reacted around exactly the type of levels you are describing. I don't know if this is consistent with the stock market or not but I can tell you that in the forex market the large majority of individual speculators are counter trend.

Market makers in the FX market are also under no regulation so they are much freer to push the market and run stops and option barriers which as I am sure you know tend to congregate around these levels.

So in short while I have seen successful counter trend traders from my experience the most successful FX traders trade with the trend.

If you are interested in trading against the individual speculator then I would highly recommend studying FXCM's SSI Index which you can see an example of here: Speculative Short Pound Interest High As Traders Bet On The Range

They publish the positioning of all their retail order flow once a week via dailyfx.com and twice a day for free to live clients via Forex News | Forex Trading News | Currency Trading News.

I find this to be a very timely indicator as when this number goes to extremes (representing a buildup in small speculators in one direction) the market tends to break in the opposite direction. I personally use this to look for breakout opportunities but it could also be used to trade counter trend as if there is not a big buildup into a major support or resistance level in the opposite direction then this would be a good indication that the market will probably not break it.

Hope that helps. If you check it out I would be interested to know your thoughts.

Best Regards,
Dave




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Disclaimer: Trading is risky and can result in substantial financial loss. As always my posts are simply one traders opinion and should not be taken as trading advice. I am not a financial adviser so everyone please do their own analysis and take responsibility for their own trades.

I was just looking at a DVD seminar of Steve Nison,, He mentioned that institutional traders go for obvious stops.. Like round numbers or so. I don't get it very clear yet... It's like a puzzle.

There are terms to call when a break of resistance happens for a short period of time and goes back below resistance "fall from the roof" .... These tricks eat stops.

For all this unpredictable factors... I just go strong on the Risk-Reward ratio before placing an order.. There is a price for being wrong, and it better be a small price.

Good trading everybody!