There is a common misconception that the Forex market is open 24 hours a day seven days a week. Theoretically, the global Forex market is open 24 hours seven days a week but an individual is still limited to the hours he can trade. Opposed to other regulated markets such as the London Stock Exchange which operates all 24 hours except on weekends, the Forex market is open and flexible and allows traders to trade at almost any time. Opposed to the Forex market there are four major trading sessions common in the currencies from 13:00 GMT up to 16:00 GMT. These sessions are the London Open, the Sydney Open, the Tokyo Open, and the New York Open.
It is during these sessions where a great chance for profits takes place as the different currencies narrow down the price difference giving the trader a chance to make a profit. If a currency has a lower bid price than another currency the trader will tend to close trade between these two currencies. These price differences aren’t extreme and can be exploited for profit. 더 알아보기
How can you take advantage of these price differences? The Forex market is flexible and our expert publications can be used to predict how currencies will fair. If a country is producing more than it is importing the currency will tend to have a higher bid price and if a country is exporting more than it is importing the currency will tend to have a lower bid price for the currency being sold.
If you forecast that a country will shift into a lower price trend you should consider buying the currency having a lower bid price and resizing your orders so that they create the needed profits as the currency narrows down the price difference giving the trader a gain. It is a simple process that is used by experienced traders but most newcomers don’t have the time or expertise to use this strategy.
Another strategy a newcomer can use is to break the larger patterns of a price and the currency prices will reflect this shift. For example, if the price of a currency is close to the level of support then it is a sign that the currency is weak and if the price is close to the resistance level then it is a sign that the currency is strong.
Support and resistance levels can be used very effectively in with most of the leading and lagging indicators that traders are accustomed to using such as moving averages, stochastic, RSI, MACD, and others.
As a strategy for managing the risk in forex trading, it is very effective to use the support and resistance levels in conjunction with other investment tools such as:
– the use of CFDs or a futures contract is designed for the Forex Markets
– spreads or currency price quotes
– options that cover the risk of price fluctuation
– and of course the use of trading strategies.