I already wrote about night Forex trading in binary options section but due to the lack of information about it on the Internet , I will review its features again. It is believed that the feature of the night trading is not only flat (sideways trend in the narrow corridor), but also the psychological factor: the night man is more scattered, less assembled, ready to surrender in case of failure, which is reflected in its strategies. I will say that there is some truth in this, but it all depends on the rhythm of life. If the trader used to sleep from 04.00 to 12.00 PM, the night trade for him is a native of the parish.
Night trade in Forex
Proponents of night trading say that it is a very convenient option for those who love calm market. The lack of volatility, flat, channel 20-40 points. Because basic strategy is based on the purchase at the time of touch support and selling when it touches the resistance level. There remains only the task to set the estimated channel, formed on the basis of statistical data. The following is a sample night trading Forex using limit orders.
When you build your own trading system, you should consider three main points:
- the timing of the trade. The closing of US exchanges happening from 23.00 to 01.00 GMT, but trading becomes quieted already at 22.00, that is a good time to start night trading. The opening of Asian stock exchanges — 3.00 (Tokyo) and 4.00 (Hong Kong). At this time it is recommended to close the position. News in Japan usually go through 1-2 hours after the opening of the session, which may affect the quotes of at least the yuan and the yen. However, the economic calendar may help;
- selection of currency pair. Mathematical expectation of income — 3-5 items, since the market is not volatile. Therefore choose the currency pair with low spread. Best pairs are EUR/GBP, EUR/CHF and GBP/CHF;
- selection of a broker. It is also important to spread, but with one caveat: at night, some DTS can increase the spread, because of the small number of applications traders do not enter the market, and work with the broker and with each other. Often in the contract specifications this moment is specified, but is it worth the risk? On the Internet, you can download a script that will measure the current and the maximum spread at any period of time.
Recommendation. Trading at night is something radically opposite the day trade. It’s like totally different strategies: scalping or long term trend, day or night. For the Asian session developed the separate strategies that should also hone in on a demo account. And that’s exactly what you cannot do is to go to bed in the hope that the Expert Advisor will do everything for you. Anyway, how can you sleep knowing that your deposit is managed by some program? The adviser is an assistant that will monitor the situation and will give a signal, and your task is to analyze it and make a decision.
Night trading in the Forex market can provide several options of trading: bounces, which I mentioned above, trading the pullback relative to the movement of the trend day and the market entry an hour after the start of a new day, towards the close of the previous. Don’t be afraid to experiment, the probability of losses in the night trade is offset by their small size.