Forex is the most extensive and liquid asset market that trades around the clock 24/7 in different parts of the world. With this seductive timing, forex seems attractive for part-time trading and overseas.
Well, is it possible to trade forex with a full-time job? Can you trade forex at night and get equal benefits? You may also want to know:
How do I trade forex in sleep?
For trading at night, get more knowledge of the forex markets, their best trading hours, and specific time zones. Be well-prepared for the upcoming trends and learn how to trade different currency pairs at night. Overnight trading tools and some other strategies may also help to reduce risks.
In many countries, the best forex trading hours fall at the end of the day due to differences in the time zone between Europe, America, and other countries. So, trading hours expand overnight in different timeframes.
Trading at night is different from regular trading hours and is more challenging. It’s pretty hard to predict the upcoming trends of different currency pairs. If you want to trade at night, this post will help reduce the risks entailing overnight trading.
Keep reading to learn how to trade successfully at night!
Is It Possible to Trade Forex at Night
Frankly speaking, you can trade any time whenever you like, whether it is day or night. Remember, not all trading hours will give you benefits.
Of course, you can trade forex at night because the forex market is widespread in four different parts of the world with specific time zones. It means if the forex market of one region closes, another will keep trading during their regular business hours, so trading prevails all day and night.
Successful trading often relies on your trading strategy and how much risk you can tolerate. Trading currency pairs at night may provide good opportunities for long-term investment strategies and also, for short-term trading patterns.
Best Ways to Trade Forex at Night
Forex is a global marketplace for buying and selling foreign currencies in four different trading sessions. Due to a lack of liquidity, the forex market is less active during the night.
Trading at night becomes critical for daily or short-term traders. They can get stuck making difficult trading decisions at night. However, position or weekly traders and those who work with long timeframes can easily keep an eye on during the daytime.
Trade Specific Currency pairs at night
For trading at night, you should follow some basic strategies. These strategies will protect your position even if you are sleeping. The most important strategy is to trade in currency pairs that are most active at night and fit well in your time frame.
For example, If you choose a currency pair to trade such as AUD/JPY, analyze their correlation. Spare some time to study market trends during the day and then trade wisely at night.
Place Stop-Loss Orders
Electronic trading programs are beneficial because the forex market tends to be in flux all the time, and it’s difficult to monitor all day long.
So, make your computer your trading partner and employ a trading program. Employ a stop-loss order strategy to avoid potential risks and big losses. It can protect your money in case a market trend goes against your position.
Use Overnight Trading Tool or AMOs
Overnight trading is an investment tool (AMOs). You can buy assets aftermarket hours when the market is closed and at night before the forex markets open the next day.
This type of trading is useful for those traders who want to adopt forex as a part-time job and also, who don’t have enough time to pursue the stock market during regular market hours.
Why should you choose overnight trading when you can trade well during regular hours?
Overnight trading enables you to place your order of selling, buying, receiving, or delivering commodities before the market opens. With the help of overnight trading, you can decide your next move and book your order as soon as the market opens whether you are busy in your day job or sitting in front of the screen
Moreover, if you are unsure, you are free to decline, modify, or cancel your overnight order before it works. Remember, overnight trading involves some risks too and many factors can affect your AMOs badly. So, be prudent while using the tool.
Use Electronic Communication Networks or ECN
Another tool for night trading is after-hour trading or ECN. It enables investors to react to real-time news and company earnings releases before and after routine trading hours. In fact, prices may fluctuate or even swing greatly on an earnings release.
ECN, an electronic communication network, will help you to buy or sell your stock after trading hours; you just need to place an order.
However, forex trading through ECN is a bit different and holds some limitations and risks in contrast with regular trading on Nasdaq or The New York Stock Exchange.
Tips For Trading Forex at Night
Trading at the cost of sleep can make your life miserable. Sleep is essential for good health. Good sleep is necessary for a successful trading career. Some fantastic tips will help you to trade successfully at night. Such as:
Set Automated Alerts
Different techniques are suitable for trading in different forex systems. If you want to exit trade partly based on support and resistance, then recognize important pivot areas and set “good” or “bad” alerts on those areas. Good alerts will sound when your trade moves up towards profit. If a bad signal sounds, you can wake up and select to either exit or stop.
Take Fewer Positions for Longer Timeframe
Do your research, and feel the pulse of the specific exchange and currency pairs you are dealing with. Another good strategy is to select a few positions
and holds those positions for a longer timeframe. Additionally, utilize the stop-loss order technique to reduce any possible loss.
Look for long-term trends.
Identify daily or weekly trends that work for a longer time and make further moves accordingly. Set alerts that will inform you about new price movements while you are away from the monitor.
Set Up Entry or Exit Orders
In forex, speculations on currency prices are effective strategies to avoid high risk. If you want to avail every good opportunity, set stop-loss, limit, or entry/exit orders before going to sleep.
Trading at night can be really profitable with the help of trading tools and real-time news.
Should you trade forex at night?
The forex market is open 24 hours during the trading day, you can trade at night with your day job. Hence, day trading offers you more trading opportunities, so, it’s optional but not advisable.
The market is most active during the daytime when more than one market is available for trading. However, most of the currency pairs trading occurs at night. So trading at night depends on your specific time zone and the type of trading you are dealing with.
What time should I wake up to trade forex?
The best time to trade forex is when the market is most active, the US/London markets overlap from 8 a.m. to 4 p.m. EST. Most traders wake up at 9 a.m. to take advantage of high trade volume and more opportunities. On the other hand, forex trading is less volatile at night.
It means most of the traders are active during day hours. Additionally, liquidity reduces significantly. Primary currency pairs such as GBP/EUR and USD/EUR often tend to be less volatile at night.
Do forex traders ever go to sleep with an open position?
Long-term traders can go to sleep with an open position, especially if they are confident and are consistently profitable traders. So, if you are not losing or risking too much money beyond your limits, you can leave your trade open.
However, if you are risking money and are unsure of your trading methods or ability, you should lower the risk by setting your stop loss and going to sleep.
In short, trading at night is more challenging. But it can become a good option if you follow some tweaking techniques and do your homework before getting started. Though the forex market is more predictable during the day, it’s still possible to trade positively at night in different time zones. So, no need to quit your job!
Of course, some trading techniques, tools, and apps can help you trade better yet, but they also have drawbacks. Increase your knowledge, learn more trading skills, use longer timeframes, and utilize proper strategies. Don’t overtrade, especially when you are losing.
Other vital trading strategies such as risk tolerance, time horizon, leverage, and the use of technology also contribute to the success of overnight trading. Lastly, use trading tools wisely, not blindly.