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5 Hidden "Secrets" & Fun Facts about FOREX Trading

In this article, we are going to share 5 hidden "secrets" and fun facts about the FOREX market which might amaze you!


Read on to find out more!


1. How 'BIG' is the forex market?


We were all told about how 'liquid' the FOREX market is. And it has the highest liquidity among all the tradable instruments. And, on that notion, so just how BIG is the FOREX market?

I guess a picture speaks a thousand words.


Figure 1: Transaction in USD per Day.


From figure 1, we can see that the sheer volume transacted for the FOREX as compared to the Stock Markets. 5 Trillion dollar transacted as compared to only about 50 Billion for NY, Tokyo and London Stock exchanges combined!

No wonder it is termed as the most liquid market in the world and you can trade 24/5,literally!


By far, this was the best picture I can find online to illustrate my point. The truth is that the figure has grown to 6.6 Trillion (NOT 5 Trillion) as of 2019!


Figure 2: Transaction in USD per Day (Edited from Figure 1)

Figure 3: Forex transaction over the years. (adopted from www.reuters.com)


2. The FOREX market actually does Close and Open!?


Technically, we all know that the FOREX market is open 24/5 Monday till Friday but it does have a opening and closing timing as well!

Take a look at the table below and you can see that for various different markets, there are different opening and closing times.


Figure 4: Open and Close timings of various FOREX market Center (adopted from forex.timezoneconverter.com)


The timings here are corrected as of Singapore Standard time (GMT +8hrs). So if you want to have something easier for your specific time zone you may refer to this website to change it accordingly.


That being known, it will bring us to our next point, when is the best time to trade and make the most Bang for Bucks?


3. When can we expect high volatility ,big moves in the FOREX market?


This can be an important question for you if you day-trade. In order to profit from the market, we need the price to MOVE. If it doesn't then why are we trading, right?

Check out the following two figures and you will know when to and when not to trade.


Figure 5: Time where volatility of FOREX market spikes (adopted from oanda.com)


Figure 6: Days where volatility of FOREX market spikes (adopted from oanda.com)


Clearly from Figures 5 and 6, we will be able to single out the time (corrected to SG time) where it is best to trade the FOREX market. The timing for the day would be from the start of London open till just before the close of London markets. And, as for the days to trade, we would expect much higher volatility on Tuesday till Thursday.


PS: Though, I do trade on Mondays and Fridays as well but during the later part of Mondays and Fridays before 12am of Singapore time!


4. When NOT to trade in the FOREX market.


The pointers I about to share here are just my own preferences in trading the market, you can, by all means discard whichever not relevant to you. Just for sharing purposes.

TO TRADE !


NOT TO TRADE !


About 1 hour after london open,

Sundays (Early AM of SG time) – everyone is sleeping or enjoying their weekend!

Between London and US session (the overlap),and,

Fridays ( After 12am SG time) – liquidity dies down during the latter part of the U.S. session.

Mid-week moves,on average pip ranges widest.

Holidays – everybody is taking a break. Market can be errantic! Give yourself a break too!

Major news events – you don’t want to get whipsawed!

Table 1: When "To trade" and When "Not to Trade"


5. Last but not least, trading is not a get RICH quick scheme.


Check out the stats and screen caps below (from dailyforex and babypips) and you should understand why, trading is by no means a get RICH quick scheme as "Promoted" by a lot internet gurus!

Figure 7: How long to become profitable? (adopted from dailyforex.com)


Take a look at Figure 7, to be successful in FOREX trading by any measures you need to trade at least 3-4 years. So, forget about the get rich quick scheme!


Also look at the Figure 8 below, on average 70% of retail FOREX traders nett loss money from their accounts! This was a stats collected from the various brokerage firms.


Figure 8: 70% of retail FOREX traders losses money from their account (nett lost)


With this in mind, shouldn't we be thinking how we can "create" that edge for ourselves such that we can be that 30% "winning" traders in the market?


Won't it be nice to have a mentor to guide you and help you avoid making unnecessary mistakes in trading? You can find out more from my courses and mentorship!

Or If you are keen charting your path to be a better trader, why not join us in our whatsapp group where we share trading ideas, best practices, and alert each other on potential trade setups.


Hope you have enjoyed 5 hidden "secrets" and fun facts about FOREX markets!


See you around!

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