During every Forex trading session, regardless of which international country with the biggest financial centre in that area is assigned the trading session name, the financial district which has the main financial hub in that area is branded with the session name throughout their daily business hours. This is essential in any financial market, and when it comes to Forex trading, it is paramount to know which markets or currencies are more liquid during these business hours, and also which are not. A few years ago, I was tasked by a client to research this very topic matter, and as it was my first experience, naturally I had to do my homework. I went ahead to find the capital that was needed to start investing in Forex trade and decided to start with one of the largest and most liquid Forex markets, that of the New York Stock Exchange (NYSE).
A few minutes after I hit the web address which allowed me access to this piece of information, I noticed a very disturbing fact. The opening and closing for this particular stock market are scheduled for exactly the same time everyday. At around four o’clock in the afternoon on one of my days off, I decided to log into the NYSE’s web portal, and was stunned to see this information. Not only were there no charts, but there was no indication whatsoever as to what time my selected stock would be listed in their daily report. There were no time specifications placed on the information provided, meaning that anyone can just take my word for it and trade without question, assuming that the clock indicated the correct time.
After approximately 20 minutes, I decided that it was simply not worth wasting any more time. That same evening, I made the decision to move on from this particular trade high volumes everyday with a proven winning system instead. I did not bother logging into the NYSE’s website during the time that this “news” was being disseminated. I made all of my purchases and trades directly through my online Forex broker. Since then, I have never once heard about this. I have learned that trading high volumes everyday is the most efficient way to trade, so I never even bother reading a newspaper’s schedule of forex trading hours.
There is yet another way to evaluate how predictable the forex markets are. It is called the “Vixibility Factor”. According to this method, the higher the volatility of the underlying security, the greater the price change over the course of any given day. Therefore, it stands to reason that the higher the volatility, the greater the opportunity for profit.
Now, for any trader to maximize their profits and minimize their losses, they must learn to manage the amount of time spent monitoring the forex trading sessions. For instance, if a trader wants to maximize his or her profit, they must learn to take their time watching the sessions that include the most volatile assets. By the time the investor decides to enter the session, they should be in the position to judge how much volatility is present. If the asset is moving with a large velocity, the trader may enter the market and begin to trade. However, since the volatility is high, the volume of activity is likely to be minimal, and the profit will be modest. Instead, the investor may want to wait until the next trading day when the asset begins to move with more momentum.
Many investors prefer to use the GMT formula to determine when to enter a trading session. The GMT formula is simply a weighted average of the largest and most liquid securities in the current stock or forex markets. Therefore, if you wish to get into the markets, you should consider using the GMT formula. After learning about how to use these tools, you should also learn about where you can find a demo account. When used properly, these accounts give you a real-time look at how the markets are acting, allowing you to become familiar with the necessary charts and trading strategies before investing large amounts of money.