The best time of the day to trade. TIMING
When planning a trade, you need to be aware of the time of the day that you will pull the trigger. Timing a trade properly does not only determine how well the trade performs. It reduces the whipsaws you will have to see through. Also, timing determines the reward on your risk.
Volatility is high during the opening hours of market sessions and news release. These are the times volumes are high, and the market tends to move. The London and US sessions are the best sessions with high volatility, and movement tends to be high during this time. Asia session also has high volatility, especially when News comes out. So, if you are planning a trade or looking at a setup, be prepared to pull the trigger when the session opens or just before it opens. The dead hours of the market are when the price readjusts itself for the next session, so don't be too anxious to pull the trigger.
Pulling the trigger on a trade when the market session is fully open allows you to see if your analysis is wrong or not. Volatility is high, volume is also high, and the price is moving very fast. That is why you need to be patient and let price come to your zones or level. Price moves all the time in the market, but movement increases during opening hours.
Professional traders have a good understanding of timing, and this is why they pull out a better risk-reward ratio from every trade. Trading is all about risk-reward, and the more reward you can pull out depends on how well you time the trade. An intermediate trader and a professional trader can take the same trade, but the pro trader will make more money than the intermediate trader: even when the risk is the same.
Timing helps you to determine where your stop loss will be. Instead of the usual placing of stops miles away, timing enables you to use a tight stop loss. Tight stop loss helps you earn a good reward on your trade. You might be wondering, what if my stop loss gets hit before the trade goes in my favor. Well, that can happen if your broker's spread is bad or your timing is wrong. Spikes occur sometimes, just before the trade starts to perform. And if you are having this problem, then you are closer to the pro level than you think. Because all you have to do is to filter out which pair will spike and the ones that won't. Once you have done this, you will know where to put your stop loss.
I will be glad to see your comments below and let me know what you think and what stage you are in your trading journey.
Disclaimer: The content above represents only the views of the author or guest. It does not represent any views or positions of FOLLOWME and does not mean that FOLLOWME agrees with its statement or description, nor does it constitute any investment advice. For all actions taken by visitors based on information provided by the FOLLOWME community, the community does not assume any form of liability unless otherwise expressly promised in writing.