fxcm-traits-of-successful-traders-guide

TRAITS OF SUCCESSFUL TRADERS: PART TWOWhen is the Best Time of Day to Trade Forex?EUR/USD - Average Hourly Range in Pips25201510500 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23Late US, Asian, and Early European SessionCHART 2.2EUR/USD average hourly (Eastern Time) range in pipsSource: Appendix 2.2By reviewing Chart 2.2, you can see that thisgenerally correlates with the low-volatilitytrading hours. Traders tend to see the bestresults during the low volatility Asia Sessionhours.This is because most individual forex tradersuse “range trading” strategies – buyingoversold currencies near support and sellingoverbought currencies near resistance. Thesetend to work well during low volatility times,when support and resistance tends to hold.Range traders can incursignificant losses when support or resistanceis broken, which happens most often duringthe more volatile times of day.DOES THE TIME OF DAY THAT I TRADEMATTER?Yes, it matters a lot. We have constructeda strategy that closely models your “typicaltrader” (You can find a full description of themodel strategy at the end of this article). Wesimulated the strategy’s performance tradingthe EUR/USD16