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Keeping on top of forex trends overnight: A guide

If you’ve ever traded forex, you’ll know that this is an industry which doesn’t sleep. As the name of the asset class suggests, the exchange of currencies taking place is international in nature. That means that the market operates across different time zones, and it doesn’t stop just because the US and European markets aren’t awake. In fact, a great deal of forex action can take place in markets like China, Australia and Japan – so there’s plenty to keep on top of.

However, not even the best foreign exchange traders can remain awake for 24 hours a day, five days a week. That means you’ll need to rely on some tools to plug the gap when you’re not at your desk in order to be sure you’re not losing money. This blog post will share some top tips on how you can make sure that you stay plugged into the forex trading world – even overnight.

Choose the right broker

As the top site Forex Traders shows, it’s vital to be sure that you’re trading at a broker with competitive spreads. However, brokers can also come into their own when it comes to ensuring that overnight trading goes as planned. At a bare minimum, you should ensure that your broker offers tools like stop losses – a tool you can use to automatically close an open position once it reaches a certain position of loss.

That way, you can control your positions even when you’re not at your desk. Ideally, however, your broker will offer much more than this. They might, for example, offer you an economic calendar which flags when events are coming up in the world of finance and monetary policy over the next few hours. That way, you’ll be able to plan your trades based on what could realistically happen overnight. The more of these sorts of tools your broker offers, the better.

Reading in the morning

While it’s certainly true that events in the world of monetary policy and finance can sometimes impact your forex trading, sometimes you can catch up on these after the event. For that reason, it’s worth scheduling some time into your day every morning to make sure that you get the latest news about what has happened overnight.

Not everything in the forex trading world needs to be addressed and dealt with straight away. The impact of a monetary policy change, for example, can be felt immediately – but it can also have a delayed effect too, when the market has had time to digest the information. By scheduling regular check-ins throughout your working day, it’s possible to make sure that you’ve got most of the hours covered.

Emergency events

It’s also worth putting a plan in place for emergency events. It’s somewhat inevitable that, as a forex trader, you’ll need to spend a small number of nights at work, but it doesn’t have to be every day. Instead, you need to identify what counts as an emergency market moving event, and plan to be ready if such an incident occurs.

You may, for example, consider a plunge of a certain number of units – say, ten cents if you’re trading the US dollar – as an example of something that needs to be dealt with urgently. As a result, you can set a notification to let you know if it looks like the market might be heading in that direction and with that sentiment. That way, you’ll know that you’ll be able to avoid staying up most nights – and will only need to do it once or twice when it really matters.

Don’t go crazy!

Finally, it’s also worth ensuring that your head is in the right place when it comes to managing the prospects of an overnight trade. Especially in the early days of life as a trader, it can become very tempting to track the markets all night long and never go to sleep. However, in the long run, this will be damaging to your health and to your portfolio.

Instead, it’s better to use the methods outlined above to develop a strategy and to use that as your hedge against the ups and downs of nighttime trading – rather than trying to surge on through.

In summary, forex trading is certainly not something that only takes place during the day. On the contrary, it’s happening all day and night long during the week – and it’s vital that you as a trader make sure that you use effective tools to stay in tune with the market during the times when you’re not awake or working.

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