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Lesson 14: What are the best times of day for trading forex? - YouTube
Channel: Financial Wars
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and hello everybody welcome back I'm Rob
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Booker these are your FX trading 101
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lessons let's talk about FX hours and
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news when I first started trading in the
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early 2000s I was getting up in the
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middle of the night I was living on the
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east coast of the United States and I
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was getting up in the middle of the
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night to do my trading and I did that
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for a very important reason I was a day
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trader I was trying to be a day trader
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anyway and the forex market is active
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primarily during the really early
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mornings in the East Coast and what I
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want to do right now is I'm just going
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to use eastern US time but you can
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translate this into your own time zone
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so assuming you're on Eastern Standard
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Time and you can translate this into
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whatever hours and whatever place that
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you live I want to talk to you about
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what's going on in the forex market at
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these hours so Eastern Time at about 5
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p.m. what you would say eastern US time
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and this is a range 4 o'clock 5 o'clock
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in that area 4 o'clock five o'clock six
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o'clock rough this is what you would
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generally fir to as the close the market
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close it's not really the market close
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but you would generally refer to it as
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the closing of the market the forex
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market is open 24 hours a day Monday
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morning in Australia all the way through
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Friday in Australia so you could phrase
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it any way you want but the the forex
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market is essentially open from Sunday
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to Friday and really only closed on on
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Saturday it's open all the time 24 hours
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and there's no real closing of the
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market Nate doesn't like shut down or
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closed off but at about midnight London
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time 5 p.m. 6 p.m. eastern US time it's
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generally referred to as the close of
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the market all right so there you have
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it that's that's generally referred to
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there is no real open of the market but
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you could say that the market kind of
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gets going and kind of starts opening
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around 2 a.m.
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to 3:00 a.m. Eastern Standard Time wind
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traders in London are sitting at their
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desks so the majority of the world's FX
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traders live in London and work in
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London and in New York City so 2 a.m. to
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3 a.m. at the open of Frankfurt and
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London and all of those places Eastern
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Time is generally referred to as a super
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active market time and short-term
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traders love action and that's a really
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active part of the market all the way up
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until about 8:00 9:00 a.m. Eastern u.s.
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time when the London market starts to
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London slows down London slows down at
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9:00 a.m. in the morning because that's
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about 3:00 p.m. to 3:00 4:00 p.m. London
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time and so you're getting a huge exodus
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of all those traders out of the London
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market and then from about 10:00 a.m.
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all the way to 5:00 p.m. Eastern Time
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everything is generally really slow and
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not moving very much so those are the
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times you want to think about and I used
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to get up at 2 o'clock in the morning
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and trade from 2:00 to 3:00 in the
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morning 4 o'clock in the morning 5
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o'clock in the morning because that
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would be active when the market was
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bouncing around and moving around a lot
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but that's not usually the way that
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people talk about the currency market
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it's the best way to talk about it
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because you know when it's most active
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the best way to talk about it is when
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it's most active but the way that most
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people refer to the market is they talk
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about the Asian session the London or
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the euro session and then they talk
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about the u.s. session and they talk
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about sessions typically the Asian
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session is viewed as slow and this is
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morning in Tokyo and Australia when
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there are
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the majority of the world's traders are
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not awake and so the Asian session is
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usually but not always slow the euro
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market is generally viewed as
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fast-moving and active and this is
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morning in Frankfurt and London and
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that's generally viewed as a fast-moving
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session when lots of currency traders
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are sitting down at their desks and
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doing trades the u.s. session which
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starts in the morning in the US and
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specifically around 7 o'clock 7:30 in
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the morning New York time is generally
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viewed as good not great but it's good
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it's not the most amount of activity but
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there is this crossover where traders in
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London and traders in the US are trading
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at the same time and that's generally
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viewed as pretty active now why would
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these sessions be active and what
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creates activity in a trading session
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well the major factor in creating
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activity inside of a training session
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excuse me is economic news economic news
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our economic reports such as employment
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reports interest rate reports consumer
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price indexes gross domestic product
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trade balance reports when we talk about
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FX trading and the news we are generally
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talking about scheduled economic events
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that appear on an economic calendar if
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you go to a website like forex factory
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calm I'm sure it's pretty difficult to
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see that URL up there in the box if you
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go to it's not too bad right forex
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factory comm has the one of the world's
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most famous economic calendars and it
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will show you on a daily basis the
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economic reports which are scheduled for
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release in the near future off to the
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left here you can see a calendar and you
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can scroll through certain date ranges
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and you can look at a whole week's work
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worth of economic activity you could
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also sort the calendar by nation and by
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type of economic report so for instance
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you can click on a tiny little button
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here that looks like a funnel so you're
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going to look for a little green thing
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that looks like this that is a terrible
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drawing
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by the way you're gonna look for that
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right up here in the section and what
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this is gonna do is it's going to help
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filter out the economic reports that we
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look at what I choose to do is only look
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at the economic reports that are marked
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in red across all economic calendars on
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Forex Factory and FX Street comm and
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Bloomberg and everywhere else a red
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report is generally viewed as something
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that might create a bunch of market
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activity you can also decide that you
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want to choose maybe only central bank
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or interest rate related economic
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reports those are my favorite ones
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because they create the most amount of
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movement employment reports also include
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a lot of movement but you might include
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all of the economic reports that these
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folks decide are really important you'll
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also get to choose which countries you
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want to choose economic reports from and
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typically you just choose all of the
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ones that are available but subtract
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nations that you don't on a typical
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basis think about visiting you know you
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know strange countries like we don't
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need to see any sort of economic news
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come out of countries that you don't see
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economic news on the regular evening
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news about so you would choose Australia
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Canada Switzerland euro British Pound
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Japanese yen New Zealand dollar and US
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dollar those are the majors those are
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the most important ones you click apply
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filter and then boom you get a list of
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economic reports that are coming out now
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if manufacturing PMI is coming out on
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Tuesday April 3rd for the UK you can
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click on this little folder and you can
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see the latest release a summary of what
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that report means the recent history of
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the data and so forth there's a whole
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line of thinking that says that if you
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compare what is expected to come out in
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an economic release with what actually
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comes out you can have a trading
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strategy some people would say that oh
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you look at the Canadian employment
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report and what you do is you see that
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on March 9th
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there was forecasted that 21,000 jobs
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would be created but in actuality only
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15,000 were created or you could see
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that there were forecasted in February
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10,000 jobs that were created in the
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previous month but in fact they lost
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88,000 jobs that's a huge difference and
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that massive difference between what was
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expected and what was real ended up in
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an extraordinary move for the Canadian
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dollar well that's the way that people
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think about economic reports in reality
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all economic reports do as far as I'm
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concerned is they create activity you
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can't really predict which way it's
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going to go oftentimes an economic
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report will come out it will look like
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it's positive news for the currency but
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the currency will go down why is that
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it's because the economic report is a
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catalyst for movement but it's not
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necessarily the reason for movement and
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there are thousands of different reasons
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that traders have for trading in the
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directions that they trade so you might
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want to if you are a short-term trader
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look at the upcoming economic calendar
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look for interest rate statements
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employment changes and reports like that
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and you might focus your attention on
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days where that big news comes out
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because there could be a lot of bouncing
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around and lots of activity on those
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days you might find that those are your
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favorite days to watch the market maybe
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not but it's totally up to you you can
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also become a student of economics you
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can read there's a variety of books
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available I have them laying around the
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office but I don't want to go digging
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for them right now it's not a big deal
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you can read several books about
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economics if you are incredibly
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interested so I would I would recommend
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to you if you go down this route go to
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amazon.com or your favorite bookstore
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and look for the word macro
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let's see delete oh come on you can do
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it you can do it oh come on it just
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suddenly will go here and we'll see if
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we can see if we can back up it doesn't
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appear that we can back up oh here we
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got this little keyboard here let's
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delete that and let's type in Oh macro
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economics in books okay so you can look
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for a macroeconomics cheat sheet which
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is pretty cool you can look for books
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about there's a good one a concise guide
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to macroeconomics by David Moss this is
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a really nice general guide on getting
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started understanding the the big absent
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flows of economic activity in a country
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that's a really great place to get
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started so you might want to check that
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out anyway that's a little discussion
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about hours that the FX market is active
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and economic news we'll be back in our
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next video I want to thank Forest Park
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FX as our sponsor if you're interested
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in trading FX contact Forest Park FX to
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open an account and receive cashback
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rebates on every trade you place go to
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Forest Park FX comm forex trading
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carries a significant risk of loss terms
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and conditions will apply
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