What is the best schedule for online trading?

What is the best schedule for online trading?

Illustration: What is the best schedule for online trading?

Traders, whether amateurs or professionals, need to know that some hours are better than others for online trading.

Market conditions change over time, and these conditions may determine if your transaction is successful or not, as well as how much profit you will make.

Be aware of market opening hours 

The Forex market can be described as a continuous market. In fact, the main reason the Forex is open 24 hours a day is that currency quotations are identical on all currency markets, and as there is always at least one exchange open for trade at any time, Forex quotations are uninterrupted. But some times are more favourable than others in spite of this continuity.

Depending on the hour, two or more currency markets can be open at the same time. There are overlapping schedules to take into account.

When dealing with stock exchanges there are three major geographical time zones: the United States with the New York Stock Exchange, Europe with the London Stock Exchange currently seen as the most important European market, and Asia with the Tokyo and Sydney Stock Exchanges..

To achieve the best possible results, some experts recommend trading only when at least two currency markets are open at the same time.

The idea is that you benefit from a more liquid market with an increased volume of trade. However those time slots can also lead to greater volatility on the markets.

There are two major overlapping schedules if you are based in Europe:

overlap between Europe and Asia from 8:00am to 10:00 am.

overlap between Europe and the United States from 2:00pm to 6:00pm.

Sydney and Tokyo opening hours overlap between 1:00am and 7:00am.

If you are planning a trading session you must opt for pairs adapted to your strategy to allow you to follow trends, make a profit, or avoid index volatility. But you can also adapt your strategy and take schedule availability into account for your trading operations.

Choose the best time

Recent research points to the considerable influence of timing on trade performance.

Many strategies can « fall flat » because of a mere timing issue, so make sure you take into account both trade flow and seasonality when scheduling a transaction.

Analysis of results over several thousand trading operations clearly show that on average, a trader stands a better chance of making a profit at certain specific times in the day. Understanding the behaviour of most online traders may reveal why.

It seems that most traders opt to buy when rates are low and sell on when rates are high. And this technique is more popular when trade takes place at the time of greatest volatility. But such a strategy does not adapt well to market conditions. The key is to find the times when index fluctuation is less volatile in order to maximise profit.

Some experts even recommend waiting until some markets are about to close and trade is slowing down before carrying out an operation. You can thus avoid periods of highest volatility which are not necessarily conducive to worthwhile profits.

Find the best schedule for your strategy 

Research on trading behaviour and the resulting profits shows that correctly scheduling a transaction is key to its success. But this schedule will vary with each trader and must take several elements into account: indices traded, market opening hours, as well as peaks in volatility at the relevant stock exchanges. There is no perfect time which suits everyone, on the contrary taking all the parameters into account is crucial when working out the best possible timing.

In fact this is one of the basic recommendations for improving your trading strategy and making as much profit as possible. The idea is also part of the Best Practices guidelines from the top traders. If a trader has little flexibility when it comes to his work schedule he must resort to choosing the indices he trades with according to when he can time his transactions. However the trading schedule is only one major component of a successful trading strategy and the success of a transaction does not depend solely on it, but also on many other variable factors.

Last Update on 13/09/18

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