Forex Trading: Do trends begin on the same day of the week?

Do you think it would be helpful to know what time trends in your currency are probably to start? What if you were able, determined by years of data, to know what days of the week are optimal to trade in your specific currency pair? This could amount to forex secret trading because you have a leg up by knowing when these developments are probably to come about. Studies have shown what
the most active trading day for a currency, and the optimal hours within that day to trade - including what are the most active trading hours within that day.

This information does not tell you HOW to trade forex, but rather WHEN to be able to capitalize on your possibilities for a successful trade. We offer you some guidelines as to how far the price is likely to progress for the duration of this trend, how much of that move you can realistically expect to catch, and lastly how long the trend is likely to last.

Let's get down to it with the GBP/USD. Trading the four-hour (H4) bars analyses show 31% of trends initiate on Thursday. Why use the H4 you ask? H4 offers the benefits of intra-day trading without having to always be watching your PC all day. Also, it filters out much of the "clatter" of the lesser timeframes.

And what are the optimal hours to trade within those days? Data shows that between 1 and 9 am eastern time is the best, the most active. This isn't big news because this period includes much of the time that the London market is open. Hour of highest activity, where trends are almost certainly to begin is 5 am eastern...which is 10 am in London.

Remember London is commonly five hours ahead of eastern time in the US. There is a brief time in spring and fall when the disparity is four hours...and this is because the UK and the European continent do not go on and off Daylight Savings Time on the precise same day the US does.

Therefore now we understand the very best day and time to trade the GBP/USD is Thursday beginning with the 5 am eastern hour.

Now, how long can we assume a trend to last? Again, with the four-hour bars we observe that 48% of the time the trend lasts between 6 and 11 bars. Six H4 bars equals a full day - 24 hours. 11 of those bars equals 44 hours, not quite two complete days.

Last of all, how much of a move can we expect that trend to make and how much of it can we realistically expect to snare? In our GBP/USD illustration Thursday is again the winner showing that the usual pip gain is 147 of which we can expect to capture around 85% or 125 pips.

Armed with this information, do you believe it would improve the odds of your currency system forex trading? While not an exact forex currency market article, this information will help put the odds on your side.

Visit our site below the Resources section to download and read your own copy of this 37-page commentary which we call the Cheat Sheet.