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.

drawdowns

I've been busy on designing new systems that would be profitable since the last post. For now, 4 (amybe 5?) different systems are in my lab and I am using 2 of them in real trading, and the other 2 are waiting in the line. Why? Because the combination of all of 4 requires a big account that could save itself from big drawdowns. Drawdowns are one of the main threats (why not "only" but "one of them", I will explain later) for a system. Sooner or later, an average system will produce positive outcomes. But for small traders who are trying to follow a system, entry point (not of a trade but of a system) could be very important.

What is drawdown? There are some info in here and here. Check them out. I will share my ideas about systems and my trade results later.

a trial for a new system

hi all,

I am an amateur forex trader and have been trading for 3 years with some breaks (military duty and my main job requirements).

Now, as always recommended to traders, i will try to put my trading logs to check them later, to remember what I have done in past, what should I do in future.

As a beginning, I will post my experimental trading logs in demo accounts. These trades are ordered by a trading system which has been in development phase for some months. I have built 3-4 trading systems but none of them was as solid as expected.

My last system is mainly based on MACD indicator (with some assistance of course) and working on daily data. This system produces 3 kinds of trade order. I haven't given any name for them but for now lets say, entrepreneur, slow mover, top billing.

Each one has different attributes; triggers in different cases, ends in different cases.
According to my statistical works, in most of currency pairs, entrepreneur and top billing have lower risk/reward ratio. So as a beginning I will use them heavily, rather than slow mover.

I am trying this system for lots of pairs, but I see their reaction are very different for same parameters. Some of them are moving in one direction but with large pullbacks, some of them prefer to simply move in one direction generally. Furthermore, some of them is not even trend-friendly. (I am sure most of you know these very well, but I like to write my thoughts to see them later and say "do I really think in this way?, ouch!..")

So I treat them seperately, using (slightly or heavily) different approaches for every pair.
As a result, I use different kind of trade orders for different kind of pairs to get a good risk/reward ratio.

I will post them their current condition and will see what will happen..

Stay tuned..