If you are also into Forex trading, you might as well be taking advantage of the best timing and maximize profits. If you are able to learn enough about the way various markets across the globe operate and can make this same choice you too can earn good profits on your trades. To be precise you too can get into power hour trading..
In this article we will discuss the two most important components that give Power Hours the edge that it enjoys. We will examine volume and volatility.
The Power Hours are those when volume and volatility both go up and are at its peak. High Volume in Trading means that substantial number of lots of a particular currency pairs are being traded, i.e. bought and sold. And High Volatility is when those currency pair prices are moving swiftly and trending quickly.
This particular phase and combination of – force of high volume and the volatility strength are capable of resulting in large pip movements in almost all the major currency pair during the Power Hours. And this is what a Forex trader has to identify and take advantage of to maximize his profits from forex trading.
The most powerful hours start from 8am to 12pm EST. The most active trading period is only four hours every day. This is the US-European overlap session, which is the time when the world’s two most active trading centers cross — as the European session is closing and the US session is opening. It is a small, but very active, window is the “hot zone.” and the professional traders who have mastered the art of Forex trading focus their prime energy and efforts on trading during these four powerful hours.
Currencies to Trade during the Power Hours include combinations such as EUR/USD, USD/CHF, USD/CAD, GBP/JPY and, GBP/CHF
The least active time to trade, often referred to as the “cold zone” is the overlap phase of European-Asian markets. Most forex traders are asleep during this short period. Trading volume is extremely thin and the trends are also quite unpredictable during this overlapping period. It is advised that forex traders identify this one too stay out of it! This period is a good time though to prepare for the European market’s opening session.
The cold zone runs from 2am to 4am EST.
We hope that we have been able to help aspiring forex traders to maximize their profits. As traders we all have to remember that timing is an important tool that can be used to identify strong price movements. And taking advantage of it is the secret of effective and profitable trading.
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