Trading Forex early in the AM

[trader273 10]

This is for the people that trade forex in the am session. I am on the east coast, and looking at the charts, it looks like a lot of action happens at the London open, about 3am EST. Im just wondering if there are people that are up to trade this. It seems like I miss a lot of setups because I'm still asleep. Just want to see how your quality of life is. Since I would be on London time, I would be basically sleeping during the day and trading at night. How long can a person go on like that. Any input is appreciated:)

[torero 10]

I know alot of forex traders from the US (mainly east coast) who trade all hours. One in particular who sets alarms on this charts and take the trade and go back to sleep. If you plan on taking short term trades, then you can try it out. Forex is really about breakouts anyway, so alarms will do just fine. Not everyday you'll get alarms imo.

 

You can always try the pairs that are in your area, USDCAD or USDJPY for example. I live in Spain, I get up about 6:30am, 2 and a half hours before london opens to get the day ready so I don't have a problem with this.

[trader273 10]

I mainly look at the eur/usd, though trading the cme equivalent (Euro-Fx) i like the regulation. Ive heard too many horror stories of forex bucketshops. I thought about the idea of setting alarms, but getting constantly woken up almost seems worse then just getting up and staying up. Thanks for the input though:)

[torero 10]

those bucketshops are dying out now, if fxcm is changing, so will the rest. I use mbtrading to avoid these shops. efx and oanda are good also. except for major news and extremely low volume, almost all the big pairs have 1 pip spreads.

[Dr Who 10]

I'm in Japan and will trade the Tokyo afternoon session, (miss London morning 3 days a week) then trade the London afternoon and New York morning till 2- 3am Japan time. Then I 'll go to bed and wake up at 11am.

[Anonymous 11]

In a real world way, the 24 hour currency market is a myth. Some times are simply more appropriate to trade than others. Most tradable moves begin around the London session and end before the end of the New York session. Take a look at any chart with volume. You will see volume increase around 0200 EST and then dry up after 1400 EST. I used to have a real problem with this when I traded using ACD as Mark Fisher states that the domicile market open for the Euro/U.S. Dollar is at 0230 EST. I would argue that there should be two openings-one for each currency in the pair. I finally figured out why Mark uses this time: it allows him to use the same opening range number for both the London and New York session. That way if the move does not start in the London session, he can possibly catch it in the New York one. As you correctly observed, most moves start out in London. Most of the best ACD trades start out in the London session.

 

New York, however, has the important news information. I don't know where you are, but can you name the head of the London central bank? How about the Fed? Get my point. When was the last time you stayed out of the market prior to German retail sales figures? My point, what happens in the U.S. matters. So when are the hours to trade. Well, if what happens in the U.S. matters, then we should be trading during some of the hours the S&P and NYSE are trading. But we know volume picks up noticeably when London opens. So our day needs start at 0200 EST and go until 1500. Although it is not a great idea to initiate a position after 1400 hrs. And we definitely want to be out by 1700 when interests are updated.

 

I use a 30 min initial balance period that starts at 0230 as per Mark. So first trade can't really be before 0300. Done for the day at 1400 hrs. Longer on Fed days. Sh*8 ! I should be in bed right now.

[Kiwi 16]

New York, however, has the important news information. I don't know where you are, but can you name the head of the London central bank? How about the Fed? Get my point. When was the last time you stayed out of the market prior to German retail sales figures? My point, what happens in the U.S. matters.

 

This is true and also frequently makes the US session much less tradable than the European session.

 

I was trading currencies from Australia so the European session starts late afternoon although I've given that up to trade Asian futures because the hours are more lifestyle friendly. Because the "big" news doesn't occur during the European session you get beautiful trends and retracements on 5m charts. The shock of the 8:30 news announcements in the US seems to create an underdamped ringing in the markets that spoils such trend trading for some time afterwards. However, when the market didn't spike you often got some lovely trends thru until the NY afternoon.

 

Personally if I was in the US and really wanted to trade currencies rather than stocks or futures (you have a great range of things available in your timeframe) I'd either move to a larger timeframe or strategize my day based on whether there was an initial news spike.

[Anonymous 11]

This is true and also frequently makes the US session much less tradable than the European session.

 

While it is true that most people should not try and trade the news and most market moving news occurs during the US session, it is not true that it is less tradable. The news does not happen every day. And on the days that it does, one only has to "step back" as the new is released.

 

Moreover, news related events are used by Professional money to take advantage of the herd. If you track Professional money then news events become opportunities where you can see Smart Money footprints and trade along side of them. Usually the herd will rush in on bad news and sell, while the Smart Money is buying, and then price actually turns and heads up.

You can see the Smart Money setting up for the move prior to the news (hours and sometimes days ahead). Once you learn to track them, the news takes on a whole different light.

 

You don't care what the actual news is. You don't really care how it is interpreted. But the way it is interpreted is usually opposite of the way price ends up going.

 

" A professional trader isolates himself from the 'herd' and becomes a predator rather than a victim. He understands and recognizes the principles that drive the markets and refuses to be misled by good or bad news, tips, advice, brokers, or well-meaning friends. When the market is being shaken-out on bad news, he is in there buying. When the 'herd' is buying and the news is good, he is looking to sell".--Tom Williams, Master the Markets P.23