Forex Trading Strategies and Forex Market Volatility

Part of developing a profitable Forex trading strategy involves being able to determine the volatility. The forex market is open 24 hours a day and are unable to keep track of all market activities, all the time. You need to understand the timing of the various markets, especially those in which we act and those that affect your business so that it makes the situation the best possible decisions during your busiest hours.

DifferentMarkets are influenced by different market conditions. All currency pairs are subject to market fluctuations, but most currencies tend to be more or less volatile during certain times of the day. As a trader, you need some knowledge of the system of currency trading, currency pairs in different time zones and the conditions that have influenced their volatility.

Forex Trading Pip

The London market is the Forex market's largest and most volatile in the world, as some of the biggest desks isBig banks are located there, and shops that usually with large sums of money. The London market share of about 30% of all markets. The market hours from 2:00 a 12.00 clock clock EST, which is also the time for which most transactions are completed. The benchmark for the volatility is well established 80 pips and more than half of the pairs of London foreign exchange market are likely to reach more than 80 pips. It would not be unusual for the range of daily EUR / CHF and GBP / JPY currency pairsmore than 140 pips average. The ability of these currency pairs, huge gains in a short time to appeal to the traders are willing to risk in the company to generate forex trading system.

Since most of the main market participants complete their circle of currency conversion in the London market hours, daily trade activities peak during this period, leading to high volatility. Shortly before the end of the trading session in London, most large investors will convert their European heritage in U.S. dollarsThe activities in anticipation of opening the U.S. market. This conversion is responsible for the increased volatility in GBP / CHF and GBP / JPY currency pairs. The trading session in New York, the benchmark for trading in the United States and is the second largest FOREX market. Trading hours are from 8 to 05.00 clock clock EST. Most transactions occur in the U.S. market from 8 am until noon ET. In this period the market is still in session that creates a market for high liquidity. Tradeduring this period of overlap about 70% of currency trading pair in the European session and makes about 80% of currency trading pair in the session of the United States.

Other currency pairs that are at high risk traders call the LSE during the hours of the USD / CHF, GBP / USD, USD / CAD and EUR / USD currency pairs. It is not uncommon for these couples reach a daily series of about 100 pips. This level of volatility creates opportunities for market entry. In contrast, nounusual for the AUD / JPY, EUR / CHF, AUD / USD and NZD / USD currency pairs every day to reach the range of about 50 pips. This volatility is more attractive to traders who try to avoid the risks. The volatility indicates that these couples are less likely to create a loss.

The London market also overlaps with the Asian market. The trading session in Tokyo is the benchmark for the Asian market. Trading hours are from 7 4:00 ET and watch the clock. Large investors in the Tokyo market positionsin anticipation of the opening of the London session. The GBP / CHF and GBP / JPY currency pairs are also highly volatile during this period of overlap. Trade during the overlap period, which is 2:00 a 04:00 clock, the lowest of the entire trading session. Traders use these trading hours slow to position themselves for the opening of the European or U.S. markets.

Forex Trading Strategies and Forex Market Volatility

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