Why should not trade during the press conference and market consolidation
The forex market is open 24 hours a day and 5 days a week. Most of the novice trader in the forex market tends to trade the live assets all day long. But if you look at the professional trader then you will see that all of them wait patiently in the market for the best possible setup to execute their trades in the market. Unlike the novice trader, they are more focused on quality trade execution since they know that a good trade is thousand times better than a poor quality trades. Though the forex market is open 24 hours a day there are certain times that we should not be opening any new positions in the market. In this article, we will discuss the most dangerous time to trade the market.
Consolidation pattern: If you are trading the live assets for long period of time then you know that the market forms a consolidation structure before participating in the large movements. If you are relatively new in forex trading than you shouldn’t be opening any position when the market volatility has been ceased to a great extent. Most of the time the market breakout the consolidation pattern with a massive spike and if you trade with potential stop loss than chances are very high that you will have losing trades in the market. So it’s better to trade the breakout rather than consolidation.
Press conference: During the press conference of the leading countries, the market becomes extremely volatile due to an important statement released by the leading leaders of the economy. Most of the novice traders lose their hard earned capital while trading the wild volatility during a press conference. But the experts knows very precisely regarding the market conditions and they keep themselves away from opening any new positions at that time. They wait patiently until the dust settles down in the global economy to execute their trades in the market.
The closing of the market: There are many professional traders who often ignores Friday trading session since they know the market will be closed for two days. Though it’s not that important as the above mentioned two points but if you are relatively new in forex trading then you shouldn’t be opening any position prior to the market closing. You should remain patient and wait for the next trading week to execute your orders in the market in favor of the long-term prevailing trend.
Summary: There are many differ way trading the financial assets but as a trader, you should know the dangerous time to trade the assets. Most of the professional traders trade clear setups in the market and make a decent profit in trading. Unlike the novice traders, they believe in high-quality trade execution rather than quantity. When you open any orders in the market make sure that you follow proper risk management factors since it is one key ingredient to remaining profitable in the long run. Last but not the least don’t trade during the press conference since the market is totally unpredictable at that time.