Your Trading Rules and Strategy
When it comes to trading the forex market, every trader have his own trading rules and edge. Forex timing and probabilities are keys to help a trader to stay profitable on the long-term. For a trader to survive on financial markets and stay consistently profitable, trader must always track and observe his trading process and performance with honesty, to stay on top of his game. I believe more experiences than less, is more than welcome when it comes to the forex trading or anything else. That way you can always find a room and steps to improve yourself and your trading process. Forex Timing is one of the steps you can apply in your own trading, to increase your trading probabilities. Let us jump in!
Forex Outlook USD/CAD
Last time we talked about the forex outlook for USD/CAD…
If you did not see it, I said…..
“What we see is, price broke the major support zone at 1.236 level, and made new monthly lows in downtrend. What I am looking on this forex pair is a possible retracement back to this broken major support first. It would be great to see possible “Support turned into Resistance” price action behaviour. Take a look at the weekly and 4-hourly chart below…”
…and I am waiting for this kind of the scenario before we start looking for a possible opportunities as per our trading rules.
Price action confirmed this move in the following days (chart below) we were waiting for, but we did not enter in the short trading opportunity.
“Why you did not enter, it was as per price action rules!?”
Let me tell you why…
Something the majority of the retail traders get it wrong…
They focus only on the price while they forget about the timing…
As price action traders, traders who focus on technical analysis we not see only the price when we are watching the charts of the any currency pair or market.
On the chart we always see the PRICE and TIME.
If you get one wrong you drastically decrease your probabilities for a trade to workout.
Charts tells us everything we need to know. If there is anything you learn from years of trading the markets is that you should always keep things as simple as possible and ditch anything that does not help you in your own trading.
Price and Time is all we want to know and study when we are doing our charts preparation. Charts preparation and planning trades in advance is something, but not everything – timing and price action at “that moment” is what matters. It may be 100% as per rules of price action, but if the timing is bad (or vice versa), we may not “pull the trigger” and enter. Using the price analysis and time is all we need to trade the forex market successfully.
Now you are asking yourself, why the forex timing is important?
PRICE + TIMING = EDGE
Well, currency market is where the cashflow is moving in and out at specific times of the day. We know 4 major sessions I covered also in the forex basics.
Generaly speaking, some periods of the day and week are known as the “fake” directions moves or retracements periods.
During the week, retracements periods are usually on Mondays and Fridays.
During the day, retracements periods (known also as fake direction moves) are usually in the Asian Session (beginning of the day) and at the end of the New York Session (closing of the day).
How this info can help you in your forex trading?
Best Times to Trade Forex
Well, as traders who focus on high-probability trading setups, this information can help you choose trading opportunites more carefully in order to increase your trading probabilites and improve your overal win % (note: do not forget trade management too!) on the long-term.
If market showed you nice trading setup that does not mean nothing, if the timing is bad.
Even great trading setups and opportunites can fail, if the timing is bad.
In order to improve your timing entry, you can take only the best setups during the “active/main hours,days”. That means you want to ideally look for trading opportunites in active days and periods of the day (main trading liquidity).
Main days: Tuesday, Wednesday and Thursday
Main periods of the day: London session and London/ New York session overlap.
Of course, that does not mean that will work for you and on your trades everytime, but you can drastically improve your trading on the long-term with this edge, by avoiding taking trades at “bad timing”.
Knowing when NOT to trade, is as much important (if not more!) than knowing when to trade.