Bank finance articles and tips

Many people think that just because the forex market is open 24 hours a day they can trade and profit whenever they want; well... they can't. I want you to consider some points to clear your mind about this issue.

1. There are active and inactive periods in the market.

It's true the forex market is open 24 hours a day. However traders should take into consideration that there are periods when the market is active and periods when it's not. Knowing when is the best time to trade is very important and may the difference between profit or loss. The four main trading hours are:

New York: 8:00 am to 5:00 p.m. EST
Tokyo: 7:00 p.m. to 4:00 a.m. EST
Sydney: 5:00 p.m. to 2:00 am EST
London: 3:00 p.m. to 12:00 noon EST

2. Even on active periods you can't know when the market is going to trend.

Even if you know when the market is most active and has the biggest volume of trades you can't know, for sure, when is it going to move? Sometimes a day-trend starts at the beginning of the London session and some times at the beginning of the New York session. Day trading can be a very exhausting and frustrating if you don't have a plan.

3. Hard work does not mean high profits.

Many people were thought, from childhood, the value of hard work. Unfortunately this doesn't apply to trading. The markets have their own timing.

4. Over-trading the root of all evil

Over-trading is one of the biggest and most common mistakes traders make; the reason most accounts get wiped out. The fact that the forex market is open 24 hours increases people's risk of taking too many positions and too often.

5. Long trading sessions can easily cloud anyone's judgment.

Do you believe you are going to be able to take good decisions after a 9 hours in front of your computer? And after 18 hours?

The Forex market is the most profitable market of the world and anyone with the right education can make a good living out of it. Trading the forex market with a mechanical system is an advantage, over discretionary systems, that will guaranteed to be helpful. Your decisions are only as good as the information on which they are based.

Luis García - About the Author:

ABOUT THE AUTHOR
Luis Garcia studied economics at Universidad Iberoamericana in Mexico City and has been involved in trading since 1998. Determined to see that beginners succeed and to help discouraged traders gain back their confidence, he developed the Shortcut Forex System at http://www.shortcutforexsystem.com and http://www.howtoinvestforprofit.com.

By Luis Garcia De Alba Diaz