Have you ever wondered what is the best time to trade? Choosing the best time to trade is very important and requires the trader to make a great effort to reach the right trade for his analysis and the right pair to work on as well, in this article, we will talk about the right pairs and choose the best time to trade based on the trader’s Character and how he analyzed in the market
What is the best time to trade?
Learn the most important 7 factors that will help you choose the best time to trade
Of course, not all trades will become successful when know the best time to trade, but most of them will be successful based on these conditions or criteria that must be met in the trade that you will choose, and be fully convinced that your trades will not all become profitable, so we must focus on the main goal of trading, which is to Reducing losses
1 – Are you ready?
Before knowing the best time to trade you have to ask yourself first are you ready to start trading in forex? Prepare to accept loss as you accept profit, Forex 90% is a psychological factor, so if you are not fully prepared to accept what will happen to the trades, then you will find yourself retreating and closing the trades without any logical reason and you will get tense and this is very normal if you are a beginner or not committed to Risk management.
Preparation is not limited to the psychological factor only, but also the environment surrounding you if it is suitable for trading or not. , I do not mean that your workplace must be in a huge company, But the place where you are analyzing your trades should be quiet so that you can focus.
For example, to find the best time to trade, you can go to a café, a suitable and quiet workplace, or a park. The important thing is that the environment surrounding you is quiet so that you can get the best time to trade.
In order to be prepared and find the best time to trade, you must also have a good strategy that you have previously tested on a demo account for at least three months. If the results are good, you can use it on the real account, but do not rush to start on the real account, as being prepared for trading is the most important thing.
Do you have enough capital?
You can start in Forex with any capital you want, but when you find the best time to trade If your capital is too small, the obstacle to you in the future will be greater. because the Forex market is an investment market. If you deposit $50, for example, you will face obstacles in committing to Risk management because the return on this amount will be very small. Naturally, if you want to earn more money, you will decide to increase the risk ratio and you will decide to enter trades that are far from your logical analysis.
The appropriate amount to start Forex is at least $1000. This is an amount that you can apply strict Risk management to, and you will earn Small profits through your trading over time. Of course, if the capital is larger, this is much better.
2 – Commitment to Strategy
Commitment to Strategy
Commitment to strategy … Commitment to strategy, whatever strategy you choose, so try as much as possible to apply each letter in it and not modify anything, that will help you find the best time to trade and if you test it for more than 3 months in this case, it is possible to modify it because you will be fully aware of its strengths and weaknesses and the most important strengths of the strategy They are the entry and exit areas, so you must choose these areas very carefully, based on the strategy and the best pairs that you will work on.
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Most likely the strategy you have chosen has been tested before, but this does not mean that if you work with it it will bear fruit. You must practice it first in order to understand it well and get used to it so that it will be easy for you to modify it in the future.
3 – Pairs
There are many currency pairs in the forex market, so Here is a list of the best pairs that respect most of the analyses and can be compatible with your style and strategy, also makes finding the best time to trade easier.
EURUSD – GBPUSD – USDJPY – AUDUSD – USDCHF – GBPJPY -EURJPY
This is not advice to work on all of them, but test these pairs and evaluate each pair based on the strategy that you are working on, if you do not want a specific pair, delete it from the platform and test another one … etc that will help you find the best time to trade in one specific pair and then you can add more until you got 2 or 3 currency pairs that respect your trading strategy, and that’s a perfect number
Pairs correlations
There is a correlation between the pairs and each other. This correlation may be positive or Negative. For example, the EURUSD pair has a very strong positive correlation with the GBPUSD pair.
EURUSD and GBPUSD
In this example, the EURUSD and GBPUSD pairs are very similar. As you can see, the movement of the pairs is almost the same. In this case, if you decide to enter a trade, which pair will you choose? it will be hard to find the best time to trade right? Choosing the right pair is very important. Therefore, when choosing the pairs that you will trade, do not choose two pairs that are similar in movement, such as the EURUSD and the GBPUSD, but you can work on them together without having to trade them at the same time.
Because if you trade on two pairs that have similar movements, you will get the same result, right? If the result is a profit, you will profit from both trades and vice versa in the case of a loss.
You can benefit from this correlation by determining the divergence, and by determining this divergence you can enter very good trades, but this divergence is a trading method that may be different from the strategy you follow, so if it will distract you, do not pay attention to it.
The choice of the pair is also based on the strategy, and to find the best time to trade you should ask yourself…
1 – Do you Trade in Reversal Movements or with the Trend, or not interested in the direction of the market?
The times of the trend trader are completely different from the Reversal Trading, and the strategies differ as well, there are some pairs in which the trend is clear and others are not, so choosing the pair is based on your style as well, so you must determine which one you are based on the strategy and your lifestyle that will greatly help you find the best time to trade.
For example to find the best time to trade, if you are trading with the general trend of the market, your focus will be on the trend line and the support and resistance lines that support the current trend of the market, and you will place alerts in these areas so that you can seize these opportunities when the price reaches them.
If you are trading against the general trend of the market it will be hard to find the best time to trade because if the market is bullish, you will wait for the price to reach resistance areas or very high prices that the price has not reached for a year, for example, and then wait for the appropriate signal and sell… However, trading against the general trend is not recommended at all because the market is dominated by buyers, and if some bearish movements occur, that will most likely be a Retracement so that the price can continue the bullish trend.
If you are not interested in the current trend, you will decide to enter and exit your trades based on what? There are certainly many signals that push you to enter the trade, but you will find yourself after several entry signals losing many trades because you can’t find the best time to trade, and most likely you will find that most of these trades are against the general trend of the market, so it is never preferable to trade against the trend or without knowing what is the current trend.
2 – Do you trade with violent movements?
Some pairs move more than 200 pips per day, for example, the GBPJPY pair is moving from 100 to 250 pips a day but can you find the best time to trade in this pair? Such a pair needs those who trade with violent movements unlike the NZD pairs, you will find it very slow in movement.
In these violent movements, you must be fully prepared that it is possible to open a trade and after an hour, for example, you may lose or win this trade. These rapid movements in these pairs require special treatment, unlike the rest of the major pairs, such as the EURUSD, which moves from 60 to 120 points per day.
The same applies to the violent movements that occur during news. In this case, you will notice that all currencies that have strong news such as NFP, interest rates, and CPI move like crazy.. The question here is should you enter at such times? If you are trading with a strategy that supports trading during news, then there is nothing wrong with that. However, if you do not know what to do at such times, then you should not make a decision to enter.
Trading on Gold
Should i trade gold
Some traders trade on gold as a safe haven, but with little capital and high risk but gold needs a large capital to be able to bear the rebounds and re-test. If you want to trade in gold, your account balance should be more than $100, and there are also other safe havens other than gold Such as USDJPY and USDCHF
Please note that the movement of gold is somewhat different from other pairs because gold moves very quickly and the method of analyzing it is also different. It is possible to analyze the EURUSD using a specific method of analysis, and when using the same method with gold, you will not be able to find any opportunity to enter a trade and you will not understand what the current trend of gold is.
Gold is traded by many traders because it is a safe haven and also because it is constantly rising. Traders are optimistic when trading in gold. Despite this, many traders lose when trading in gold. However, they continue to trade in it in the hope of obtaining a strong rise that will compensate for these losses.
It is not necessary to trade gold if you cannot analyze it well. There are other good pairs that are easy to analyze and predict their next movement, such as the EURUSD and the major pairs.
4 – Be patient to find the best time to trade
Be patient in choosing the trade, it is possible to enter one trade every day, two days, or even a week, so the important thing is to stick to the strategy and what the strategy dictates to you. Be aware of what is happening in the market and choose your trade from 3 pairs that you have set in advance, the situation will be easier, and be patient on the trade until it reaches the stop loss or take profit that you have set in advance and do not let your rush to profits distract your mind and the best thing, in this case, is to close the MetaTrader after you open any position directly.
FOMO vs Patient
There is a hidden enemy that will not make you patient in choosing the best time to trade It will make you enter into hasty and ill-considered trades, and this enemy is FOMO
FOMO can control you because you want to make quick profits in a short time. It may make you believe that this opportunity is unparalleled and that it is a good opportunity to get the quick wealth that you have always wanted. You will discover after losing this trade that this decision was completely wrong and that your way of thinking when entering the trade was different from usual.
The movement of the market affects us as traders. None of us wants to see opportunities slipping away from our hands and not seize them. We all want to get money in the fastest way, right? But in reality, the matter is completely different from what we want. Money comes with hard work and perseverance, and also when losing many times, This will help us understand the nature of the market.
5 – How do you choose the Lot size for your trades?
Do not rush to choose the lot size once you see the right trade for you and the entry and exit areas. You must specify the appropriate lot size that you will risk in this trade and many sites count the lot for you based on the stop loss and the number of pips that are away from the target (do not forget to add the Spread when calculating) and the risk shouldn’t exceed 3% in a single order
Here you can calculate the lot size according to your risk management.
6 – After finding the best time to trade Follow up on your trades
Follow up your trades
You should follow your trades from time to time to avoid the occurrence of some news while your trades are active or to modify some orders and follow up on the trades that are different from one trader to another. Scalping trader his traders do not take much time and they can follow their trades starting from 15 minutes to two hours and intraday traders It is possible to follow up their trades every two hours … etc.
This is not a requirement, you can follow the trades every minute if you want, but the psychological factor is significant to set a specific time in which to follow up on the trades and not distract your mind with open trades and losses or profits, and there are some experts recommend offering a stop loss at Entry area in case of achieving some profits or depending on the strategy used of course.
Following your trades is a double-edged sword. You can use it carefully so that you do not make losses when you are busy with other things. and You can follow your trades too much, in which case you will make illogical decisions in order to increase the speed of the price to reach your target.
Of course, the market will not move to reach your take profit if you move the take profit or do anything, as the market moves based on its own factors. If you decide to move the take profit or stop loss, this will not benefit you at all, but on the contrary, it will harm you greatly because this decision stems from the fear of loss and your desire for the price to reach the take profit as quickly as possible.
There is a difference between following your trades and fear of losing your trades. Following trades comes with following up on the news and economic events happening in the world and looking into what has happened in the market recently.
Based on these developments, you make a decision whether to move the take profit or stop loss or not to do anything. For example, if there is strong news on the EURUSD pair and you already have a trade open on this pair, what will you do? At first, the decision to enter the trade was not based on the news for whatever reason. It is possible that you did not notice any news at that time, but when you know that there is news about to happen, is it safe to close the trade or leave it open?
There are two types of traders in these situations. The first type is the one who decides to stay on the safe side and does not want to take risks because he does not know the details of the news and closes the trade in the event of a loss or profit. A small loss is much better than a big loss and he may lose all of his capital as well if he keeps it.
The second type is the gambler who keeps the trade open without knowing anything about the news, and yet he decides to gamble with all his capital. This type is considered one of the 90% of traders who constantly lose in Forex. It is clear that such a decision is a hasty and completely unreasonable decision Because he decided to risk all his money in one trade that was affected by economic events and did not leave himself the opportunity to trade another day.
7 – Take a final opinion
You may consult a professional Forex trader, as he may provide you with some information that may help you in the analysis. There may be support or resistance areas or internal trend lines that you did not notice, After this trader or friend tells you his analysis of the pair, this analysis either supports your analysis or contradicts it. In both cases, his opinion is considered just a means of learning, not to change your opinion completely. If his analysis matches your analysis you will obtain an entry area and a more accurate analysis, nothing more.
Do not consider the analyses of professional analysts and the analyses you see on social media are perfect and do not fail. because in this case, you will completely ignore your analysis because you will not learn anything and your mind will stop working because it has become nothing but a follower.
Conclusion
After you made the analysis and reached the last step, which is to open the trade, in this case, it is possible to take an expert opinion to make sure of your analysis, and there may be some things that you have overlooked and modified and also there may be an opportunity for another better Pair From that one you analyzed, so always be on the lookout for the market and remember that sticking to the strategy or steps that you have set for yourself is very important and will help you grow in the forex market
