| |
|
Article Directory :: Finance & Investment Articles
Part of developing a profitable Forex trading strategy involves being able to determine market volatility. The Forex market is open 24 hours per day and you will find it impossible to keep track of all market activities, all the time. You will need to understand the timing of various markets, particularly those in which you are trading and those that influence your trades, so that you are in a position to make the best possible decisions during your trading hours.
Different markets are affected by differing market conditions. All currency pairs are subject to market volatility, but most currencies tend to become more or less volatile during certain times of the day. As a trader, you will need to have some knowledge of the currency trading system, currency pairings in different times zones and the conditions that affect their volatility.
The London market is the largest and most volatile Forex market in the world since some of the largest dealing desks of large banks are located there and transactions that take place usually involve large sums of money. The London market share is about 30% of all markets. The market hours are from 2 am to 12 pm EST, which is also the time for which most transactions are completed. The benchmark established for volatility is 80 pips and more than half of the London market currency pairings are likely to reach in excess of 80 pips. It would not be uncommon for the daily range of GBP/CHF and GBP/JPY currency pairs to average more than 140 pips. The ability of these currency pairs to generate huge profits in a short amount of time appeals to traders willing to take risks in the currency trading system.
Since most large market participants complete their circle of currency conversions during the London market hours, daily trade activities peak during this time, causing high volatility. Near the end of the London trading session most large investors will convert their European assets to US dollar assets in anticipation of the opening of the US market. This conversion is responsible for the increased volatility in GBP/CHF and GBP/JPY currency pairs. The New York trading session is the benchmark for US trading and it represents the second largest FOREX market. Trading hours are from 8 am and 5 pm EST. The majority of transactions occur in the US market from 8 am to noon EST. During this timeframe, the European market is still in session, which creates a market of high liquidity. Trading during this period of overlap accounts for about 70% of the currency pair trading in the European session and about 80% of currency pair trading in the US session.
Other currency pairs that appeal to high-risk traders during the London market hours include the USD/CHF, GBP/USD, USD/CAD and EUR/USD currency pairs. It is not uncommon for these pairs to reach a daily range of about 100 pips. This level of volatility creates opportunities for entry into the market. In contrast, is not uncommon for the AUD/JPY, EUR/CHF, AUD/USD and NZD/USD currency pairs to reach a daily range of about 50 pips. This level of volatility is more appealing to traders who attempt to avoid risks. The level of volatility indicates that these pairs may be less likely to create a loss.
The London market also overlaps with the Asian market. The Tokyo trading session is the benchmark for the Asian market. Trading hours are from 7 pm and 4 am EST. Large investors take positions in the Tokyo market in anticipation of the opening of the London session. The GBP/CHF and GBP/JPY currency pairs are also highly volatile during this timeframe of overlap. Trading during the period of overlap, which is between 2 am and 4 am, is the lowest of any trading session. Traders use these slow trading hours to position themselves for the opening of the European or US market.
 EasyPublish™ this article - publishers click here
More articles by Andrew Daigle
|
Free Report!
Ten Essential Secrets Of Article Marketing ... Grab Your Free
Copy Now:
Need Content?
Regular Top Quality Content for your Blog, Ezine or Website ...
Delivered Direct,
For Free!
Click For Details
Arts & Entertainment
Automotive
Business - General
Computers & Technology
Finance & Investment
Food & Drink
Health & Fitness
Home & Family
Internet Marketing/Online Business
Legal
Pets & Animals
Politics & Government
Reference & Education
Religion & Faith
Self-Improvement/Motivation
Social
Sports & Recreation
Travel & Leisure
Writing & Speaking
|
More finance articles: - Here's How Ordinary, Everyday People Are Making Money With Penny Stocks! (Grant Dougan)
One of my favorite investment types are penny stocks. Some investors stay away from these types of shares since they believe that they are risky. Don't let yourself be nervous though - you will earn incredible cash if you know how to find winners. - Daytrading Using Mean Reversion Strategies (Scott Cole)
Mean reversion is just another strategy that daytraders include in their arsenal when attacking markets on a daily basis. The opposite of the momentum type strategies, it is a good way for the daytrader to diversify and be able to find opportunities on a daily basis. - Fibonaccial Trading Techniques For Forex (John Eather)
Fibonacci was the great mathematician from Italy. He founded the new sequence of numbers and it was named after him called as fibonacci. The 0, 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144, 233, 377,610 etc are the numbers of this sequence which has the starting of 0 and 1. Each number in this sequence is the sum of the preceding two numbers. - Forex Trading - The Market Is Not Your Enemy (Jay Meisler)
Every trader at one time or another has had a bad trading day that makes him feel like the market is his enemy. This article uses an example from a forex trading day to describe some of the conditions when this might occur and what a trader might be going through during this time. The goal is to create an awareness and to emphasize that the market is not the enemy. - Discovering the Pros and Cons of Using a Prepaid Credit Card (Tara Tiemann)
Prepaid debit cards are becoming a popular way to pay purchases and bills. It works like a credit card but instead of paying at a later time, a prepaid debit card can only be used if there is a deposited amount of money in your account. This article will enumerate the advantages and disadvantages of using a prepaid debit card. - Hard Money Lenders - Hard Money Loans (Louis Jeffries)
Real Estate Investors choose to use hard money loans as a source to purchase and rehab property to make a substantial profit that they may not have without the use of this expensive money. - Top Ten Reasons Why You Should Buy Multifamily Properties (Lance Edwards)
When you sit down and examine the advantage of owning multifamily properties, you will be amazed at the multitude of benefits. While other avenues of income generation offer some attractive incentives, owning multifamily properties brings many great things to the table. Let us explore these advantages: - 3 Types of Investors for your Multifamily Deals (Lance Edwards)
The word "investor" is quite a general term that means different things to different people. Dictionary.com defines an investor as "someone who commits capital in order to gain financial returns". So what does this mean in terms of real estate investing? There are three types of investors: lending, equity and hybrid (or combination). Here is a breakdown of these three types of investors. - What a Multifamily Property's Class Can Tell You (Lance Edwards)
When you are dealing with multifamily apartment properties, it is very important to understand the different classes of properties. The class that a property is assigned can tell you a lot about the property and if it is worth your time and money to invest in. There are four different property classes: A, B, C, and D. - 5-Step Process to Financial Freedom Through Real Estate Investing (Lance Edwards)
You have learned how to create a real estate business. But at the same time, you want to create your net worth. The steps to getting this done are a 5-step process. Not only can you apply this process to your business, but you can apply it to your personal life.
We Automatically Distribute Articles
To Thousands Of Publishers And Web Sites:
Submit Article
All content is viewed and used by you at your own risk and we do not warrant the accuracy or reliability of any of the information. The views expressed are those of the individual contributing authors and not necessarily those of this web site, or its owner, Takanomi Limited.
|
|
