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When I first started trading twenty-five years ago there were no home computers to trade with. The only people in the Forex market were major banks and institutions. I started trading the futures markets (also known as the commodity markets) and each time I wanted to place an order it had to be called in by phone. There was no computer available to me that had real-time streaming prices. To get a current quote I had to call my futures broker, which I did regularly throughout the trading day.

When I wanted to place an order I would call my broker and tell him what I wanted to buy or sell and at what price. As I waited on the phone he would place the order and then after about 30 seconds I would get a confirmation of my order. If I wanted to buy a futures contract at the current market price there would usually be a lot of slippage due to the lack of liquidity. If I wanted to buy corn at $2.20 I would probably be filled at $2.25 by the time my order was placed. When I wanted to exit a trade I would have to call the broker again. It was really a very stressful way to trade.

The worst thing about trading the futures market twenty-five years ago was the slippage. Since there was not a lot of liquidity, not a lot of trading volume, the prices could be manipulated by the big shots. Any time a big institution would place a large order it would move the market a lot in one direction. However, with today’s Forex market that’s almost impossible to do. Things have changed a lot since I began trading twenty-five years ago. With as much as 3 trillion dollars traded daily in the Forex market there aren’t too many people or institutions around that can make the market move in the direction they want it to.

Once in awhile you may see the Bank of Japan intervene and attempt to change the value of the Japanese Yen (called an intervention), causing the currency pairs it’s associated with to move several hundred pips. But even when that happens the price almost always returns over time back to its original level. The Forex market is so vast no one entity can control the market price for an extended period of time. So you can enter a trade in the Forex market feeling pretty comfortable that nobody is going to drive the market against you for the purpose of stopping you out.

Another advantage to the Forex market is that you can trade any time, day or night. There are major Forex markets around the world, in London, in Australia, in Japan, in the USA, and they are all open at different times of the day. So you can trade 24 hours a day, 5 days a week. Trading begins on Sunday afternoon in the USA and ends Friday afternoon in the USA.

The European markets open at 1:00 AM EST and stay open until 10:00 AM EST. The US markets open at 8:00 AM EST causing an overlap for a couple of hours with the European markets, meaning they are both open at the same time. The end of the US market overlaps the opening of the Asian market. Because each market is open at a different time trading can be done 24 hours a day.

So if the markets are open 24 hours a day which time is best to trade? The simple answer is that you can trade any time. However, certain times do offer more liquidity. There is more volume traded during the European market session than any other session. In my experience the best trends develop more often during the European session than during any other session. But that doesn’t mean there aren’t plenty of good trading opportunities at other times. There are great trends that develop during all market hours. As long as you have a good Forex trading system you can profit from the markets at any time.

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Article Author :L._Alan_Johnson

Tags: irs, trad, forex

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Tags: forex, irs, trad