What do you think is the most common bad habit of forex traders which results in a lot of losses in forex investments?

Most people would probably answer lack of forex education and ill-equipped preparations in trading forex. While this may hold some truth into it, the most common bad habit that afflicts many forex traders is impatience.

Are You Trigger-Happy When Forex Trading Strategies?

Ask yourself, how many times have you entered a trade just for the sake of being inside the action even if your self-prepared analysis and technical indicators tell you to still wait for some confirmation for your trade?

Many traders fall into this trap of being unable to wait for the perfect set-up. And this is where many traders lose money. Since the set-up is not really according to their trade plan and they just entered the trade by pulling the trigger a bit too early, the trade becomes messed up right from the very start. The strategy goes out of the window and the stoploss levels and target profits lose their objective basis.

This usually happens when there is not much action in the forex market. Or at least, the forex markets do not exhibit the type of action the forex investor hopes for to be able to make the perfect trade. As many forex traders know, more than half the time, they are just waiting for the perfect set-up.

But what if you know when that perfect set-up will come. What of you know when the market shall start moving and up to how long the movement shall go? Isn’t that very convenient for forex traders?

Trading The GBP-USD Based On Time

Well, here’s your lucky day. I shall be sharing with you a study on price movements, specifically for the GBP/USD pair. I shall not tell you whether to buy or sell and at what levels. But what I shall be willing to share with you is when is the best time to enter a trade, and for how long you shall hold on to that position to maximize profits.

Based on a study, using 4HR bar charts, 31% of trends start on Thursday. And the best time to trade where the markets are extremely active is at 900GMT. So, on Thursdays, using the 4HR charts, identify the trend and when the market starts moving around the 900GMT time frame, you can start opening your position. The trend which begins at this point usually lasts for 6-11 bars 48% of the time. 6 to 11 4-HR bars is equivalent to 24- 20 hours, or roughly 1-2 days.

The trend which initiates on this Thursday GBP-USD habit moves 147 pips on the average, and you can usually catch 85% of the movement, or 125 pips that you can easily bag for a profit.

Armed with these statistics, you, as a trader, can now anticipate when the market will move and for how long. The guessing game is lessened. And more importantly, the impatience shall hopefully be eliminated. One cannot win in trading forex 100% of the time. But if you shall trade according to statistical behavior of the currency pairs, you shall improve your chances of profiting in this lucrative investment called forex trading.

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Tags: 4HR charts, gbp-usd, gbp-usd strategy, gbp-usd trading strategy, schedule, time based, trading strategy

Posted in Trading Strategies