There are three bases, which can be extremely handy for currency traders and are easy to implement. They are listed below and you can take advantage of these 3 bases to maximize your advantage.
The first base states that it is quite useful for some Forex traders to trade with a currency pair everyday at the same time. The reason behind this is that the other traders involved in selling or buying the same currency pair might also end up trading at the same time, everyday. This is a proven technique that is useful for those Forex traders who are able to understand and capitalize on various technical analysis of the currency market. Another probable reason would be that this sets a standardization process for trading conditions if the trader does the trading everyday at the same time. This kind of standardization can also yield profit. But never forget that the currency or Forex market is extremely volatile and can change rapidly.
The second base deals with particular currencies trading with a particular volatile situation of the market at a particular time. After you have outgrown the demo account where you have practices all your skills, you can take the dip into high waters. When you are investing your own capital there can be two scenarios. You would want to minimize the liquidity amount and the volatility to decrease your risk. The second scenario is that you can increase your risk and thus increase the changes of earning a huge profit.
The foreign exchange market revolves around the sun but follows a different path from the actual sun. Instead of the sunrise happening in the east, the Forex market opens in the west. It starts from the United States and takes the Pacific route to Australia and then to Far East and Europe and comes back a full circle to the United States. The total foreign currency trading volume is determined by the opening figure of the market and the various overlaps caused during the time the market was open. Although the Forex trading market works 24 hours a day but there are certain peak hours of trading when the volumes are relatively high. This time according to GMT is between 1 pm and 4 pm. Hence if you trade at a certain time in the day then you will be able to minimize or maximize the risk involved for a particular currency pair.
The third base deals with the volume of activity involved with a particular currency or currency pair. It is always a sound theory to capture the different levels of volatility for the particular currency pairs and thus capitalize on your profits. One of the popular tools used by technical analysts is the Bollinger bands and they help in quantifying volatility. These Bollinger bands can compare volatility with reference to their relative price over a pre-determined period of time. But it really depends what your trading manager wants to use because there are certain Forex trading managers who don’t find this as a utility tool while others swear by it. It also depends on whether the Bollinger bands are favorable for use in your situation.
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