Forex Trading – The N.Y Session

If any of you are a touch “frustrated” with your forex trading as of late – perhaps I can give you a little more insight.

It’s important to note that throughout the trading day ( that being 24 hours ) there are very specific times when markets tend to make their moves. Missing these times of high liquidity, and entering the market during times of low liquidity can be extremely frustrating for a newbie trader  – and can really make the difference in your overall performance.

There is absolutely nothing worse than having your trade order filled, only to see within a matter of minutes that the trade has moved a considerable distance against you – or even worse that you’ve been “stopped out” before you’ve really even gotten started. It’s very likely you’ve simply been caught, entering the market at the wrong time – and not that your trade idea wasn’t valid.

If you want to trade effectively during the N.Y session, you’d better be prepared to get up early – very early.

I don’t have any supporting data to further verify this – short of my own experience, but what I can tell you is that 90% of the time the larger part of the move has already been made “before” the U.S pre-market equities session even gets started.

What you are “really seeing” is the last bit of Asia and the larger part of London’s session that have already made the majority of the move – while the U.S session tends to grind your account and ( for the most part ) move counter trend.

If you want to get a jump on the N.Y session – you need to be at your terminal and planning your trades at least a full hour before the open, then wait until the last hour of trading for further confirmation – or for opportunities to add.

Very often you’ll find that your trade ideas are actually fantastic, but it’s your market entry timing that needs a bit of polishing.

16 Responses

  1. Warren June 25, 2013 / 3:32 pm

    So true Kong, I feel that your advice has gotten even more refined and relavent over the last week since you had your “Told you so” moment.
    Keep up the good work and let us know when your subscription service comes out.

    • Pot Stock Watch June 25, 2013 / 3:56 pm

      You are very intuitive Warren, and I appreciate your feedback very much.

      Yes – I’m seeing this blog become a “business” a touch sooner than expected, and in turn want to provide the best info that I can. With so much junk available on the Internet these days, I would “love to think” that perhaps I can do a bit better.

      So we’ll see.

      In the meantime let’s just keep on rollin – and keep on killin it.

  2. Superpositron (@superpositron) June 25, 2013 / 5:53 pm

    I dont know how you guys in Americas do it. Hells i wouldnt know how the Asians do it. There seems to be more meat on the bone during first half of London. I am thinking of moving to the US and Im wondering, does my working day start at 3am?

    • Pot Stock Watch June 25, 2013 / 7:22 pm

      I live in Mexico, and am Canadian for what it’s worth.

      First half of London is ideal really.

      Me……I don’t sleep. Regardless of trading forex…….the post is here somewhere – let’s search “sleep”.

      • Warren June 25, 2013 / 7:51 pm

        Our backgrounds are very similar Kong. I live in Chile, and am American.
        I sometimes wake up at 5-6AM, so that I can trade the London-just-after-open.

  3. Andrew June 25, 2013 / 8:46 pm

    Kong, how many pips do you typically take out of the trades that work? Obviously, it varies, but I’m interested in what you view as a nice profit.

    Best, Andrew

    • Pot Stock Watch June 25, 2013 / 9:04 pm

      Hey Andrew….great question.

      In general I don’t really look at an individual trade with a pre determined “take profit” as you’ve suggested – it will always vary depending on market conditions.

      My style of trading generally has “larger trade ideas” take shape over time across a number of different pairs, with varied position sizes generally based on “ATR” and my general knowledge of each given pairs movement / volatility.

      As the trade develops and “profits are seen” across the board – I will blow out the entire lot ( at times 12 – 14 pairs ) at any given time regardless of which are “deep in profit” and those that aren’t.

      It’s not at all uncommon to have 7 or 8 that did great……and 3 or 4 where entry / circumstance didn’t produce a big win. I look at the net total based on my longer term strategy – and don’t sweat the odd loser.

  4. schmederling June 26, 2013 / 12:38 am

    AUD/USD setting up for a move…. I have squeeze play’s set-up from the 30min to the 4hrs….. will be looking for an entry long or short pending fire direction…

    • Pot Stock Watch June 26, 2013 / 8:15 am

      Well….for what it’s worth – there it is!

      My long since yesterday has just been covered with “0” risk. I’ll literally spend any and all profits made long AUD on beer, Mezcal and likely more beer.

      The short term tech is freakin solid as a rock, as that entry had been on my radar for a considerable time. Hilarious, and with absolutely “zero” expectations – I’m heading off to place trades elsewhere.

  5. schmederling June 26, 2013 / 4:01 am

    long positions entered of 30min positive fire in AUD/USD…. will add more after the 1hr fire…

  6. fuzzybid June 26, 2013 / 8:56 am

    What a life you have Hong i am jealous 😉

    • Pot Stock Watch June 26, 2013 / 9:15 am

      What do you mean Fuzz?

      I work very hard, as I’m sure you do as well – and…… considering that I’ve more or less spent the last 15 years travelling the planet – there’s been plenty of “bad” ( and some real , real bad) mixed in there with the good.

      I guess it’s like anything else in life…..you want something – you likely end up “giving up” something else. I’ve made many decisions in how I’ve lived my life – that has left me in some really tough spots with few close friends, or close to family. The grass is always greener so they say, as well one has to be careful what they wish for! You just might get it!

  7. schmederling June 27, 2013 / 12:00 am

    Yup – long & abnormal hours are kept to stay ahead of the game if one means to generate positive returns in this game…… not may have the discipline to stick with such s schedule…. not for the faint of heart either….. but Kong knows this all to well…

    • Pot Stock Watch June 27, 2013 / 7:07 am

      Up and attem! Wakey Wakey!

      He he he….man no kidding – It’s a grind at times, but after a while – you “kinda” get used to it.

      At times when I’m feeling like a zombie ( and cursing some of the bells and whistles my computer makes in the dead of night ) I’ll just head on down to the beach for a walk, and quickly remind myself that it’s all worth while.

      A cold beer, feet in warm sand and the beautiful caribbean ocean generally get me back to reality and back at the computer!

  8. devilyell June 27, 2013 / 9:41 am

    Hi Everyone,

    A disreputable statistician once said, “If you can’t count it you can’t fix it”. I did the homework because it makes me feel braver about gambling with my retirement money. Beer, vodka and tequila also help in that regard.

    Here are some stats to reinforce Kong’s anecdotal evidence:

    Stats for Daily High OR Low MADE AT TIME OF DAY (NYT)
    NYT (New York / Eastern Time) = Auto adjust for Daylight Savings Time
    Some folks believe a daily H or L is a significant pivot point and trade those levels.

    51% during 3am-7am
    32% 11am-1pm
    30% 4pm-7pm
    *****************
    *****************
    Here are times of day when you have the opportunity to snag some portion of a 40pip (or greater) range. Remember, abuse leverage and you’ll never be sorry.

    60min Bars With Ranges >= 40pips (NYT)

    10-11am 44%
    8-9am 42%
    10-11am 41%
    3-4am 35%
    4-5am 30%
    5-6am 28%
    11am-12pm 26%
    All other hours 1% to 15%, but majority are single digit %.
    ************
    I have stats and strategy P&L results for other stuff.
    For example, a London ORB (opening range breakout) will make money!

    Hope this helps. Bye for now.

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