Forex Trader and Forex Trading Sessions

FOREX TRADER MEANING

Is somebody who buys and sells currencies in the global foreign exchange market. Forex traders can be full-time professional traders who earn a living by trading forex or part-time investors dabbling in forex for a side-income. 

What are types of Forex Trader?

• SCALPER
• DAY TRADER
• SWING TRADER
• POSITION TRADER
• ALGORITHMIC TRADER
• EVENT DRIVEN TRADER
• TREND TRADER

SCALPER Scalpers are short-term traders focusing on holding positions for timeframes as small as a few seconds to a few minutes. Scalping is a style of trading that aims to profit from small price changes in financial markets. Instead of buying and holding positions over a long period of time, scalpers make fast profits off a high volume of shorter trades, often lasting just seconds or minutes.

DAY TRADER An individual who opens and closes all of his or her trades before the end of the trading day, no open positions are maintained overnight. Day traders aim to utilize intraday market price action by executing multiple long and short trades, looking to capitalize on temporary supply and demand inefficiencies in market pricing. Day Trading is a strategy or style used by Day Trader.

SWING TRADER Are trader who hold trades for longer than a single day, and up to perhaps a couple of weeks. Over this short timeframe, swing traders will typically favor technical analysis over fundamentals, although they should still be attuned to the news events that can trigger volatility.

POSITION TRADER Are trader who hold trades for longer periods of time, from several weeks, months to years. As the longest holding period among trading styles, position traders are less interested in an asset’s short-term price fluctuations and more concerned, naturally, with the performance over more sustained timeframes. 

ALGORITHMIC TRADER refers to trader who use automated trading wherein investors and traders enter and exit trades as and when the criteria match as per the computerized instructions. The systems are coded with instructions to undertake trades automatically without human intervention. It saves a lot of time for investors who can take more and more trades due to their quick execution time. 

EVENT DRIVEN TRADER Traders examines the social, political, and economic indicators that might affect the price and performance of a financial asset before making investment decisions. They’ll seek to benefit from spikes caused by political or economic events, such as Non-Farm Payroll data, GDP, employment figures, and elections.

TREND TRADER Are traders who looks for trends in the movement of an asset, and builds a trading strategy around that analysis, known as a trend following strategy. If a trend trader believes a price is in an upward trend, they will buy. Similarly, if they spot a downward trend, they would sell.

WHAT IS FOREX CHART TIME FRAME?

The time frame in forex trading represents the duration or interval of a specific chart that displays price data. Based on the time frame strategy, trading can be long-term, medium-term, and short-term. Chart time frames in the MT4 trading platform are M1, M5, M15, M30,1H, 4H, Daily, Weekly, and Monthly. M1 means one minute, M15 stand for fifteen minutes, M30 stands for thirty minutes, 1H stand for one hour, 4H stand for four hours. Example if you open M30 chart, means each bar or candlestick representing an interval of thirty minutes so every 30 minutes a new candlestick is formed.

Traders use different time frames to analyze and interpret market trends, make trading decisions, and determine the appropriate trade entry and exit points.

The use of time frame to traders

• 1-Minute Chart: This time frame displays price data in one-minute intervals. It provides a slightly broader view of market movements and is suitable for traders who prefer short-term trading or scalping trading.
• 5-Minute Chart: This time frame displays price data over five-minute intervals. It smooths out some short-term noise and allows traders to observe price patterns and trends within a shorter time horizon. It is commonly used by short term trading strategies.
• 15-Minute Chart: This time frame showing price data at 15-minute intervals. It is commonly used by day traders who hold positions for a few hours up to a day.
• 1-Hour Chart: This time frame displays price data in one-hour intervals. It suits traders who want to capture medium-term trends and hold positions for a few hours to a few days.
• 4-Hour Chart: This time frame offers a longer-term perspective, showing price data at four-hour intervals. Swing traders and day traders often use it to capture trends over several hours or days.
• Daily Chart: The daily chart displays price data for each trading day, offering a broader view of the market. It is favored by swing and longer-term traders who hold positions for several days to weeks.
• Weekly Chart: This time frame provides a big-picture view of the market, with each bar or candlestick representing a week’s price data. Long-term traders and position trader commonly use it.
• Monthly Chart: This time frame displays price data for each month. Position trader and investor use this time frame to capture price trend for long term. Trader or investor hold a trade from month to years. 

FOREX TRADING SESSIONS

In Forex, time is money, literally. The forex market is open 24 hours a day during weekdays, but this does not necessarily mean that you should trade forex assets at any time, or all day. Volatility varies during different times of the day because of different forex trading sessions. To establish the best times to trade as well as the best forex assets to trade, it is important to understand the different forex trading sessions.

When is the Best Time to Trade Forex?

The best time to trade will depend on you – the trader. Your availability, your time zone, or your trading style. For instance, if you want to target just a few pips in a low volatile environment, the Asian trading session will suit you well. But if you want high volatility and big price movements, it is best to trade during the London session or the early hours of the New York session. Your time zone and availability will also determine the best assets for you to trade.

Example, during the London session you are better trade EUR and GBP pairs. And New York session better trade USD pairs for better volatile.

The forex market can be broken up into four major trading sessions

• London Session
• Tokyo Session
• New York Session
• Sydney Session

Both the Sydney and Tokyo sessions are customarily referred to as Asian sessions. This is why Forex is usually referred to as the 3-session market: Asian, London and New York.