Forex Day Trading Made Simple
Click on the following link for free forex tips and strategies, including the exact 4 hour trading strategy that James Woolley uses himself to trade the markets:
It is not easy to consistently make money from forex trading, whichever time frame you trade. However you will find that it is even harder to make money by attempting to day trade the markets because there is a lot of volatility and noise on these shorter time frames. Nevertheless it is still possible to earn some decent returns.
One of the keys to success is to forget about trading lots of positions throughout the day and instead focus on trading during the most profitable times of the day. If you’re based in the US, for instance, you may find that the opening hours of the US trading session is a good time to trade because that’s when you get some decent price moves. However the trouble is that you are also trading during many of the economic data releases, which is very hazardous.
That’s why I personally believe that the most productive time to trade is during the opening hours of the London session. During the first few hours of trading, ie 8.00 – 10.00 GMT, you have very few economic announcements, and the ones that are released don’t generally have that much of an effect on the currency markets.
Plus it’s also the time when the major currency pairs will often break out of a trading range and set the tone for the rest of the day. For instance if we say that the average daily range for the GBP/USD is about 180 pips and the price has so far traded in a narrow range of just 50 pips up until 8.00, we know that we are likely to see a big breakout in the near future.
This is a very simple way of trading the markets but it can also be very profitable, particularly if you incorporate pivot points into your trading. That’s because pivot points will often act as natural price targets, as well as strong areas of support and resistance.
Anyway the point I want to get across is that if you do want to generate some decent profits from short-term trading, you want to trade during the busiest periods of the day. You also want to trade when there are few external distractions (by which I mean economic data releases) and the markets are fairly predictable, and for me the opening hours of the London trading session are just about ideal.
You may also like to trade from around 6.00 onwards because sometimes the breakouts happen before the London session begins. However there are generally plenty of decent price moves from 8.00 onwards, so you don’t really have to get up this early if you don’t want to.
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