Category: Forex Trading

Learning To Trade Overnight Trading Range Breakouts

by

James Woolley

Trading breakouts is one of the most tried and tested methods of trading the forex markets because when the price breaks out of an established trading range, it often continues to move strongly in that direction. Therefore there are some excellent profits to be made.

There are lots of different ways you can trade breakouts. You can wait for a quiet period of the day for instance when the price is barely moving and is confined to a very narrow range, and wait for a breakout to take place, or you can use bollinger bands and wait for them to narrow because this often precedes a strong breakout. However in this article I want to talk about a particular strategy that involves opening ranges.

I’ve been experimenting with this strategy on the GBP/USD and EUR/USD pairs recently and it seems to work very well. What you basically do is to look at the opening hours between 00.00 and 06.00 GMT (or 08.00 if the price is still within this range up until this time) and draw two horizontal lines marking the high and low points for this period.

Then you simply wait for the price to break out and close above (or below) one of these lines and take a corresponding long or short position. This method works well when there is a narrow opening range and the reason it works is simple. Every pair has an average daily range (the GBP/USD is roughly 220 points and the EUR/USD is roughly 180 points according to 2008 figures) so if the opening range is a small fraction of this number, then you know that there are a lot of points to be made either above or below the current opening range.

It’s not a method that can be used every day on a certain currency pair because sometimes the price will move quite substantially in the opening few hours, but it’s well worth putting into practice when the opening range is very narrow.

There are various ways you can actually trade this system. You can either jump in as soon as the breakout bar or candle closes, or if you want to place the odds substantially in your favour, you can wait for an initial breakout followed by a pull-back into this trading range, then trade the subsequent breakout (if there is one) because this continuation pattern is a very profitable signal.

Either way you should find that these strategies (or variants of these strategies) are generally very effective because the price will very often move strongly out of this opening range at some point during the day.

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Learning To Trade Overnight Trading Range Breakouts

One of the staple techniques in trading FOREX (Foreign currency exchange) is called trend trading. This method of trading currency pairs is really simple. You decide which currency pairing you want to trade, then perform some analysis on the pair for the last 60 days, 90 days or even a year. This gives you a good feel for how the pair moves and when the best time to buy exists.Speculation can be taken away from your stock & currency trades with stock trading software. Some software is free to use and others require a purchase but the end result remains to be; buy low, sell high and increase your profit margin. You may be questioning if and why you should use stock trading software. Can it be trusted? The answers are complete automated operation and YES, you can absolutely place your trust in stock trading software.Manual technical analysis can take time because you need to trace each currency pair through charts and graphs or on FOREX trading web sites. Stock trading software puts those tools at your command. It is positively crucial for a trader to have fresh and up to the second trending information and software makes it available to you on a constant basis.To find and select the right stock trading software for you as an individual, a few things should be considered. Foremost among them is education and training, especially for novices just starting out. Look for a free virtual trial period. This allows you to use the software, see how it fits you and test the technical analysis features in real time.Trading signals are another factor in using stock trading software. Trading signals tell you when a commodity is at a low point. You enter the trade and sell the item when it rises again. That is how you are best going to make profits with stock trading software. Stock trading software can automatically enter a trade on your behalf when a currency hits a specific level and then sell when it goes higher. All this takes place even when you aren’t watching and is the foundation of trend trading.The stock exchanges are completely automated and real time info updates are a necessity. Select a piece of stock trading software that provides rapid updates that can be analyzed fast and be prepared to make your buy or sell accordingly. The markets are fast moving, so you must keep the pace as well as stay informed.Next, see if the software uses a price to earnings (P/E) ratio option. This is basically a percentage of profit related to the price paid on average. The higher the P/E ratio, the more likely you are to make a profitable trade on it. Among stock trading software programs, this is the most commonly used analysis tool. Most high end software programs will have this.Trading software helps you with data analysis, trade selection decisions and makes automatic entries to the market for you. Almost a “set it and forget it” type scenario. Trend lines, graphs and charts are all analysis tools that can be utilized to find the best entry ad exit points. Trades can take place 24 hours a day since it is always tomorrow somewhere in the world. Take advantage of the automation.

Submitted by: Stephanie Rich

For retail investors, online forex trading is the only door to enter in this biggest financial market. It is not similar to stock or commodity market which have physical presence in the market. Internet has made it possible for traders to trade the market during anytime of the day. Being a global market, it remains active for all time zones. There are numerous people who perform online forex trading as a home business and make good earnings. However, there is potential risk in trading forex online. Many online forex trading platform make fake claims, charge high deposits , take commission and at the end put you in total loss. Fake forex trading platforms offer lucrative benefits from forex such as regular income in thousands of bucks, high spread or leverage,etc.

If you are a newbie in online forex trading, study the forex material carefully. Forex is most fascinating market on earth but that doesn’t mean that you will be millionaire overnight without taking any step. You can get enough information on internet for free. There are people who trade successfully in forex and make profits regularly. Whichever corner of the world you reside in, internet is accessible to all. To trade forex you require PC with net connection, nothing else! Online forex trading tool allow traders to see real time currency movement charts and market analysis graphs. Based on the real time data shown and the auto-indicators, traders can make accurate decision and reduce the losses.

However, not all trading software provide with the accurate information and build with the correct strategies. To win in forex trading, you need to find reputed, reliable (FSA or NFA authorized), established and affordable trading platform. As per the forex experts, novice traders should try forex trading via opening demo account and once they hold a grip, they can start with the actual trading. All of a sudden a proverb is coming in my mind Where there is a great risk, there is great reward . This proverb perfectly match forex market condition. Forex is a market with extreme liquidity and potential enough to give highest spreads at the same time it is full of risk. One should trade in forex with the amount they can afford to loose!

Avoid emotions and greediness while trading currencies in forex. Don’t keep any baseless expectation from forex, it is a genuine financial market thus you can’t be rich overnight. You need to make sincere efforts to win forex. Reliable trading platform suggests traders to open multiple accounts with fair deposits. Read financial news and online material for forex regularly. Several online trading firms provide online training to learn forex. All these facilities will not only help you to learn trading but also help you to identify the trustworthy forex trading software. Find out the major currencies traded in the market. If you do not read the detail information and buy the currency which is slow in transition and rarely anyone trade it, you will end up losing the invested money. Those new in forex can also hire forex expert to protect money loss. With the help of forex expert, trader can learn predicting market movements using charts. Technical analysis plays vital role in success of forex traders.

About the Author: Stephanie Rich is an expert of online forex trading (

smart-fx.net/

) platform. He has outlined key facts of forex and some tips to follow while purchasing forex trading platform.

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