by Ntombi Malatsi | May 22, 2016 | FOREX FOR BEGINNERS, FOREX TRAINING
Choosing a currency pair to start with as a beginner.
Let me get straight to the point. There are several currency pairs available on mt4 market watch, but that does not mean a trader has to trade all of them. Knowing the different groups of currencies, their characteristics and the sessions at which they trade well in, is very crucial in making that decision. It is also important to consider your location, if you are located in South Africa like me, you are very lucky as the most traded currency pairs are traded during London session (which is the most traded session of all four sessions). London session is during our day time. Many traders who are located in other countries have to wake up for London session as it is during their night-time. I am that type of trader who analyses fundamentally and execute technically, so my views will mostly be backed up by the method of trading that I personally use (which is fundamentally based), but which ever method of trading a trader uses, sessions are sessions and there is only one London session, read about my method of trading HERE.
As a beginner trader, you are always overwhelmed by the markets, which is why I think choosing few currency pairs to trade is a good start. I know of a very successful trader who trades only Eur pairs, be it as a major or a cross currency. He trades nothing else but Eur. A trader who trades currencies when the businesses of that country are open (during the day) is likely to make money, this is simply because of the activities like the exchange of money or transactions in their respective currency during their daily business dealings. Try to trade GBP pairs during Asian session, you might not get much out of your trade.
Currencies like GBP, EUR and USD are mostly involved in daily speeches/economic news. They are easy to follow. You can definitely start with one of them, if you chose to start with GBP (I know some traders in my class are probably saying, ahem!), you can easily follow news releases like UK GDP,UK bank rates, UK CPI, Unemployment changes just for starters. GBP and EUR would be a good start, and by the way, those two are highly correlated and Eur has the lowest spread of all major currencies, even though GBP has higher margin than most, but it trades very well during London session, read more about currency pairs to trade during London session HERE. Trading one or two currency pairs gives a trader a chance to learn as much as they can about that specific currency and it also eliminates confusion, of course you can always add a pair, you do not have to trade only one pair, but the more you trade a currency pair, there more you get to know it better and therefore trade it better. Thank you for reading here, I hope you found something practical that you can use in your own trading.
by Ntombi Malatsi | Jan 5, 2016 | FOREX FOR BEGINNERS, FOREX TRAINING
Trading during the London session?
We all know that currencies can be traded at any time as the market is opened 24 hours 5 days a week, but even so, we need to know when is the best time to trade certain currencies and when is the best time to stay away from certain currencies.
It is common sense that in order to trade successfully, we must try to trade the currencies when the people of that specific country are awake because there is more liquidity.
The Forex market comprises of 4 trading sessions which open and close at different times, see Forex market hours HERE.
This session is the busiest of them all, it is the most traded and volatile session in the Fx market. London is the largest dealing centre in the whole world. The London session presents traders with more liquidity.
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The moment the London session opens, the volatility in the markets increase and during this session, we (traders) often see price movements in some currency pairs. London session is also known as European session.
My own trades are mostly during the London session, but I also trade the New york session which overlaps with the London session . I do trade other sessions as well, especially during news flow that takes place during later sessions of the day.
Which currency pairs are mostly traded during London session?
Gbp pairs in particular trade very well during London session because there is also a lot of NEWS FLOW AFFECTING GBP. When looking at economic calendars ( which is something very important to me) we can see mostly news that are specific to GBP are released at 4:30 am NY (10:30 am South African standard time) which is during London session.
I used to hate trading GBP pairs and now I realise I hated it because I traded it the most when I was still not paying attention to the daily economic calendar. My trades were always affected negatively by news, that has changed though.
GBP pairs are just fine and I trade them more often now even though their margin is a bit higher than most pairs, we are blessed in South Africa to have the most volatile session during our day time. Some traders from other countries have to actually wake up or stay up to catch the London session.
Some facts to consider
When Asian/Tokyo session opens, the companies in Japan are opened for business and will be buying and selling currencies in order to carry on with their day-to-day business deals.
This explains why we should trade the currencies when the people of that specific country are awake. This way, there will be high volume of Japanese Yen (JPY) exchange with the companies they do business with.
When Europe’s businesses are open for business, the EUR will be highly traded in high volumes, due to European businesses trading with companies from other countries.
In short, each session has its own currency pair that trades well in high volumes because of all the factors mentioned above.
Most traded currency pairs during the Asian/Tokyo session
The above mentioned currencies are mostly traded because they are domestic currencies of markets that are opened at that time. As the European session is near to closing , the volume is decreased and the volatility dies.
Another factor that lowers the volume/ liquidity is the UK and U.S bank holidays, when these two countries aren’t participating in the markets, the liquidity dies as they are the important players in the FX markets.
I also do not mind waking up sometimes to trade the Australian Dollar during the Asian/Tokyo session, the AUD news mostly happen during Asian session and when I really want to trade it. I wake up for it, as I have mentioned on my previous posts that waking up at night should be by choice and not because you are worried sick about your trades.
If you need to open a live account, for the safety of your funds, do it with a regulated broker HERE. For further assistance in terms of selecting the best broker for your personal needs, you can WhatsApp me on +27 64 510 4132 Or +27 76 966 9392.
For more information on my private mentorship, read this post HERE This is my first post of 2016, thank you for stopping by and happy trading if you are trading already. Sharing is caring, kindly share this post, thank you.
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