Forex Trading Times for South Africans

The Forex market trading time is actually 24 hours a day from 5pm EST on Sunday until 4pm EST Friday. The reason being that currencies are always in high demand 24/7. The international scope of currency trading means that there are always traders worldwide who are buying and selling a particular currency. The best Forex trading times from South Africa will be:

The four major Forex market trading sessions are as follows (all in  SA Time)

1. New York (USA) opens 14:00 PM to 22:00 PM the same day.

2. Tokyo (Japan) opens 01:00 AM to 09:00 AM the next day.

3. Perth (Australia) opens 11:00 AM to 07:00 AM the next day.

4. London (Britain) opens 9:00 AM to 17:00 PM the same day.

Normally the best times to trade is at the start of the trading session e.g. the first 3-5 hours of the above mentioned opening times, because the major currency pairs tend to move the most in a particular trend or direction in this time band.

Especially when new economic news is due to be released. We have found that the best trading time is between 3 AM and 11 AM EST. The New York and London trading sessions overlap between 7 and 11 am EST. which results in higher volatility and more trading opportunities with bigger moves in these four hours of trading.

Currency pairs that normally move the most during these 3-5 hours are the USD/CHF, followed by the GBP/USD, the EUR/USD and then the USD/JPY.

To trade in this particular time band you can use the following sources to help you determine and convert the estimated time for South Africa or your own time zone:

• http://www.worldtimezone.com
• http://timeanddate.com/worldclock
• http://www.mapmaker.com/ (We have found this the best to use. You can download this program to your desktop and set it to your local time.)

Important: Before starting your trading day and entering your first trade, always check and note the support/resistance, trend (bullish or bearish), trading range, target highs and lows and economic news release times that can impact your trades.

Range Trading With The RSI Indicator

For most of the time, currency pairs in the Forex market are trending by moving sideways, or trending up or down, within a certain price channel. For trading in such a market, use the scalping technique with the RSI indicator. These short trades, often only a few hours in duration, keep the pips coming while you wait for a bigger move.

The Relative Strength Index (RSI) is a popular oscillator. It’s a lagging indicator, measuring the past momentum of a currency pair’s price by comparing upward price pressure (green candles.

If you use candlestick charts against the downward price pressure (red candles) over a defined period of time. This is usually 14 days, the default setting in most software packages, but experiment to see what works best for you.

Like most oscillators, RSI is displayed as a squiggly line within a window beneath the chart itself. It varies up and down on a scale of 1 to 100, like a percentage, so it’s easy to understand.

The Technique

The RSI is excellent for range-bound markets. When the RSI climbs above the 70 line, that indicates the currency pair is overbought and that the people who purchased should be ready to sell it, thereby lowering the price; when it drops below 30, it’s been oversold. When the RSI crosses back over that point a second time, that’s the signal to enter the market.

For example, let’s say the GBP/USD is range-bound and dropping toward its support level. Below the chart, the RSI indicator follows it down and drops below 30. That warns you the currency pair has been oversold, and that people should be ready to purchase it, which means the increased buying pressure will cause the price to rise.

If you purchased the GBP/USD at that point, because other traders watching the RSI might not yet have caught on, the price might still be falling. You could be stopped out, losing pips.

But when the RSI changes direction and rises back above the 30, that’s the time to enter the market long. Place your stop below the price support level so that market jitters won’t trigger it accidentally, then sit back and count the pips as the price climbs back to its resistance point.

When the price reaches that point, close your trade. Then watch the RSI to see if it climbs above 70, when you can reverse the procedure.

This sort of range trading is a form of scalping. It doesn’t earn many pips at a time. But they add up, and if the signals are strong enough to justify the risk, you could always purchase more than one lot, compounding your pips as if they were interest.

Another way of reading the RSI is called divergence. That’s when the price on the chart reaches a new high or low, but the RSI doesn’t follow suit. It can be a powerful tool, too, because usually the price will change direction to follow the RSI rather than the other way around, and you can scalp more pips when the price moves to catch up.

Candlestick Reversal Patterns

Anyone who studies the stock market has undoubtedly heard of candlestick charting. Their history goes back almost four centuries as a method of technical analysis used by Japanese rice traders. It wasn't until the early 1990's that candlestick charting made its way to the western world. As popular as the technique has become in the west, it's hard to imagine a time when there was little information able to be found on the subject.

All a person needs to do is type the term "candlestick charting" into their favorite search engine and they are presented with all types of information on the topic. There are numerous websites, articles, books, software, courses, and videos. There are even candlestick games and flashcards!

The subject has been highly commercialized due to the desire of new traders wanting as much information about the subject as possible.One of the drawbacks of the excess information available on the topic of candlestick charting is that there is as much bad or incomplete information as there is good. Unfortunately, the trader new to candlesticks takes this partial or downright bad information into the trading arena and experiences financial loss at the hands of the stock market. Why? Well, just like any other type of stock analysis, "it's never quite as simple as it sounds".

Candlestick charting is often touted as a "holy grail" in the world of trading stocks, but nothing could be further from the truth. While it's true that using candlesticks can give the trader a method determining whether or not a trend may be getting ready to reverse, it's also important to remember that stocks rarely just turn on a dime and reverse course. If you look at a healthy trend on a stock chart, you'll notice the price movement from one end of the trend to the other takes kind of a zigzag course while the overall price movement moves toward the direction of the trend. If you are looking at a candlestick chart, you'll also notice there will be a multitude of reversal signals that mean nothing more than a slight pullback in price as investors take profits, NOT a trend reversal.

So are candlestick reversal signals a viable method of technical analysis? You bet they are! In order to use candlestick reversal signals successfully you need to understand technical analysis in general.

There are points of price resistance and support that will show up on the chart and most technical analysts learn them early in their studies. Just like any other method of "predicting" a change in trend, candlestick reversal patterns need to be applied to these areas of support and resistance as well. Once the trader understands the proper application of candlestick reversal patterns they can also see the results in their portfolio.