trade hours

if you are not a professional trader, according yo you trade style, you may have to make a desicion. For example, if you are opening and /or closing your trades in current value of a currency pair, you somehow reach the current value, evaluate it according to your strategy (or system) and apply the desicion. Using %100 automated system such as Metatrader, is out of this context of course. But for majority, this is not the case.

In this situation, you should trade in your available times. But, if you have some kind of freedom to choose your available times, which times are the best for trading? The main subject of the article.

Forex trading starts at sunday evening (in european time ) and ends at friday evening. Between this approximately 120 hours, the trading session in uninterrupted(Christmas day and such big occasions are exceptions).

So you can trade morning, noon, afternoon, evening or night. But which is the best time for trading. It would be a cliche but it depends. It depends on your trading style. You may trade using 5min charts using momentum indicators. Or you may trade using 1 hour chart for range trading.

I usually prefer momentum and trend based trading. So I should seek high volatility and volume, but not the peak times.

High volume and volatility occurs in overlapping hours of different markets:

New York 8am to 5pm EST
Tokyo 7pm to 4am EST
Sydney 5pm to 2am EST
London 3am to 12 noon EST

So, morning hours 6 am - 9 am (gmt) and afternoon (12-16 gmt) are the most critical overlapping hours. This hours are like pivot points. They indicates many things to enter a trade or closing a trade.

Big turns in trends and momentum accelerations happens in these hours generally. So if you use these hours carefully, your chance for being the correct side of the market increases dramatically.

I am using these hours in 1 hour time framed trades. I usually use morning hours to choose a side (to enter a trade) and generally close at afternoon overlapped hours.

2 systems of mine obeying these rules doing pretty well in these days. If they can prove it for a longer period, i will post them.

technical analysis for FOREX

Since I am still developing and testing my forex systems, I have nothing to post about them. I will post more detailed news when I have a proven track record in these systems. Until that time, I have decided to post another kind of information which will be also helpful: This is the first post of the series which will be related with technical analysis,indicators and trading systems. I will try to explain the best points of technical indicators and systems based upon them.

Let's start with the header, technical analysis:
Technical analysis is only interested in the price movements in the market.Technical analysts seek to identify price patterns and trends in financial markets and attempt to exploit those patterns. While we have several tools and methods in technical analysis, the primary tool is the price charts.

The principles of technical analysis derive from the observation of financial markets over hundreds of years. The oldest known example of technical analysis was a method used by Japanese traders as early as the 18th century,which evolved into the use of candlestick techniques, and is today a main charting tool.

Dow Theory is based on the collected writings of Dow Jones co-founder and editor Charles Dow, and inspired the use and development of modern technical analysis from the end of the 19th century. Modern technical analysis considers Dow Theory its cornerstone.

Many more technical tools and theories have been developed and enhanced in recent decades, with an increasing emphasis on computer-assisted techniques.Neural Networks and Rule Based systems are the most popular methods used in technical analysis since 1990s.

There are some main principles which are technical analysis based upon:
-Market action discounts everything
-Prices move in trends
-History tends to repeat itself


In this blog, I will try to explain some basic terms, definitions and indicators which are primary and/or popular topics in technical analysis:
-Trend
-Support and Resistance
-Chart Patterns
-Elliot Wave principle
-Moving Averages and other indicators:

Accumulation/distribution index—based on the close within the day's range
Average true range - averaged daily trading range
Bollinger bands - a range of price volatility
Commodity Channel Index - identifies cyclical trends
MACD - moving average convergence/divergence
Momentum - the rate of price change
Parabolic SAR - Wilder's trailing stop based on prices tending to stay within a parabolic curve during a strong trend
Relative Strength Index (RSI) - oscillator showing price strength
Stochastic oscillator, close position within recent trading range

I will also show some basic trading systems based upon these indicators.