Hello, I am more or less new into forex (just started to trade for real today), and I got a question that is all in the title. I was going short on USDJPY and suddenly is went up pretty fast on the 1h chart, making me lose my trade. It correlated with the opening of the NY sessions I guess (still confused about hours, change country last week), so I wondered, does all sessions support their currency, despite the trends?
Meaning that any pair in downtrend concerning USD or CAD being weak will tend to try to go back strong when American sessions open? Or will they follow as well the downtrend and I just got unlucky today?
They can move quite a bit in either direction (or they can sometimes not move very much at all).
The opening 10-15 minutes of major sessions are certainly among the day’s most volatile and risky times.
(I don’t trade the US$ any more, but when I did, I used to avoid the first 10-15 minutes of the London session and the NY session. Some people take the opposite view and try to trade at those times. Those are people who enjoy risk more than I do.)
May I ask you why you did stop trading US$? Due to harder prediction on the majors? Or just personal preference? Because I worry about USD making pairs containing it going here and there, due to volatility and high volumes traded on the $.
Sorry - I intended no “anti-trading-US$” inference at all! (I happily traded both EUR/USD and Cable for many years.) I happened to switch from spot forex to futures, that’s all. :8:
There is no rule concerning a principle of supporting one’s own currency simply for the sake of supporting it per se. But for various reasons there is often a period of shuffling at the open of sessions which may go either way.
It is worth remembering that the forex market is not just a bunch of individual speculative traders who wake up, trade, and go to bed again. The market comprises many different institutions and corporates and funds that all have various reasons for being in the market continuously, whenever and wherever the markets are open. The majority, if not all, major participants are not tied to any one time zone and/or session. They are international and pass their interests and positions continually around the globe. When Tokyo ends, they will pass on to their London offices, who then pass on to their US offices and back to Tokyo.
Also all the major participants are much longer term in their positioning and are not just interested in giving their own currency a daily boost on the open. Economic factors, trade and capital flows, and Central Bank objectives (which sometimes also include a desire for a [I]weaker [/I]currency) are going to have a much greater impact on their operations.
Sometimes institutional positions and/or customer orders may be too large to fill during quiet sessions and they may well be initiated during the early stages of a session when liquidity is greater. This can certainly cause some ripples in price levels.
On the other hand, there [I]is [/I]a significant amount of speculative trading that certainly [I]can [/I]have an impact of price levels in a limited way. For example, if a market gaps up or down on the open then there is often a tendency to try and fill that gap. When enough traders and automated systems act on such a situation then technical analysis can become self-fulfilling. Such moves might be highly visible to retail traders watching their 15m charts etc but to a major pension fund or a multinational corporate it is not even a fly dirt on their screens.
Since it is really only these major players that could have sufficient muscle to move markets (and even then only with a degree of unison), it is not really likely that there would be a daily move based solely on patriotic support for one’s own currency.
I am also learn much from here and get lesson from expert trader to broaden insight, because still often get fail trade on newyork session, and might london session is good to making profit, but unfortunately I can’t meet with this session market because still in my offline job and leaving forex awhile
Most of the inter day traders and scalpers need to worry about this sessions thing. Swing traders don’t need to worry about sessions as their trades remain open for several sessions.
Pretty clear! I’ll keep it in mind.