This is similar to that many people don't like to eat buffet, because we can have many other choices. If you like beef, no one will force you to eat tofu. Similarly, if you don't like trading Asian plates, no one will force you to trade Asian plates.
But the similarity between trading and tofu ends here. At 5: 00 a.m. Beijing time (winter time), the American market was closed, and the Asian market immediately began to provide liquidity for the market. The London market did not open again until 4: 00 p.m. During this period, 10 hour was reserved for the Asian plate, during which the market was relatively calm.
The mild Asian period
Because the main liquidity of the market at this time is provided by Asia, the fluctuation of the foreign exchange market is usually much smaller than that in Europe and America. In the survey of successful traders, our quantitative analysts carefully studied the intraday fluctuations of different currencies. The results once again verify the fact that the foreign exchange market usually fluctuates less in the Asian plate.
Since Euro/USD is the most popular and important currency pair in the foreign exchange market, we choose this currency pair as the object to test the market volatility. As can be seen from the figure, the lowest hourly average fluctuation of EUR/USD is at 4 am, that is, before the opening of Sydney. Since then, the market liquidity has gradually increased, and the volatility has started to pick up, but it is still lower than the most active period of the day, such as the opening of London in the afternoon or the overlapping period between London and the United States at 8 pm.
Many people find the Asian market boring and difficult to trade. But in fact, the difficulty of trading has little to do with volatility. The fact is that a stable Asian market is more conducive to investors to control their own transactions. A stable Asian market gives investors time to analyze the return on investment more deeply. Perhaps because of this, in our investigation of many successful traders, we have come to the following conclusion: Asian time is the most favorable time for foreign exchange trading in a day. We obtain the above results by checking the trading yield throughout the day.
The profitability of traders who trade major currency pairs in different time periods varies greatly. People who trade in Asian markets have far better trading results than those who trade in European and American markets. There may be many reasons for this result, but the most important reason is the mild nature of Asian currency markets.
Because the exchange rate has not broken through and the average hourly fluctuation is very small, the support and resistance in the early stage tend to continue to play a role. Our quantitative analysts explain this as follows: Many individual traders tend to make intraday trading in the Asian market, buying oversold currency pairs at the support level and selling oversold currency pairs at the resistance level. This strategy is really effective in the market with low fluctuation range.
The art of interval trading lies in caution.
Bulls always want to buy cheap goods, especially when the exchange rate is low and close to the support level.
We can safely put the stop loss under the support. If the exchange rate does not break, we will continue to sort out the range and earn income as scheduled. We don't want the exchange rate to fall below the support level If an investor always wants support to be broken, then he is more suitable for breakthrough trading.
When we do interval trading, there is always a basic support below multiple orders and a basic resistance above empty orders. In this way, it is easier for us to control the risk limit of the transaction. As long as we stop near the support level or resistance level, we can avoid big losses.
For example, if you place more than one order in Euro/USD, and the entry space is 50 points away from the bottom of the interval, then it is difficult to make sense to have at least 50 profit points at the top, otherwise the impulse to place an order will be resolutely dispelled.