The foreign exchange market (also known as the currencies market) is an over-the-counter global marketplace that determines the exchange rate for currencies around the world. Participants in these markets can buy, sell, exchange, and speculate on the relative exchange rates of various currency pairs. Therefore, for those who participate in this field, it is necessary to have knowledge and know how to analyze the forex market. Otherwise, you will not be able to protect your capital.
The most important thing to succeed in the tough forex market is to have the right knowledge and judgment. Assisting investors in mastering the market and the technique of catching peaks and trough Timing in forex trades. So what is Timing in forex? Is this technique unique and worth learning? All will be answered in detail right in the following article.
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What is Timing in forex?
Timing in forex is a technical analysis tool. It helps investors identify and make accurate predictions about the “effective” time to enter the trading market. In any ongoing price trend Timing in forex can provide a forecast for that period.
Timing in forex refers to trading at the right time by accurately capturing the reversal point in an upward or downward trend of the market.
The unique feature technique of the Timing in forex is the profit earned. Although not much, will certainly not make investors lose much money when the wrong position opens.
In fact, Timing in forex is neither an investment strategy nor a trading method. Timing in forex is simply a technique of predicting peaks and troughs in price movements for effective orders.
Therefore, time trading is particularly effective when players understand and know how to apply various methods.
Timing in trading
Almost 80% of the time trading is choppy. It means, the market has no clear trend and is very difficult to trade. In fact, the price movements in the market go in a single direction and are tedious, but also contain many risks. This is evident in two key elements of price chart trading:
Trend Factor: “The trend is your friend” is a well-known adage that is probably the most popular in the world of traders. Simple as it is, it exists as a guide for traders.
Intent or Purpose of Price Movement: This factor is more essential than the trend factor. Because Timing in forex is a fixed trading problem and there is no definite solution in trading.
Timing in forex refers to the timing of placing orders to enter the market. Why is it important to say Timing in forex? Because if at the correct time of closing the order we can still make a profit with a moderate R/R ratio. Even if you lose direction on the market trend, your position may not be lost, that's called a young latch.
In the opposite case, if the timing is not good, you will be kicked out of the market. Even though the price actually goes up in the direction you have chosen, even if you have chosen the right direction. This is based on trading activity in your trading history in the past.
Candles will not randomly appear on your chart. Most of the candles appear on purpose before the volatility of the market. They represent a trader's actions in the market.
In addition, the main purpose of their appearance is also intended to affect your psychology. You will appear as one of two emotions, greed and fear, which always dominate your behavior throughout the transaction.
The main problem here is that the market rarely creates a clear trend, which will always be against your goals, especially if you are a new trader. You will not be patient and expect to make a lot of money quickly by any means.
In the Forex market, the time of crossovers between trading sessions often has a larger volume than each individual session. Resulting in a larger fluctuation range of currency pairs during this time. This explains why scalpers often choose to trade during trading hours. In addition, high-volume sessions also mean better market liquidity, so transaction costs (spreads) are often lower as well.
Formula to calculate the Timing of trade
To effectively use the formula for calculating the accuracy of Timing in forex, investors can refer to the following steps:
Step 1: The trader must determine if the current price wave trend of the market is bullish or bearish. The more visible the trend wave, the better.
Step 2: Calculate the total number of days in that price wave to determine how long the up/down wave lasts.
Step 3: Take the result to the power of 3 and then take the square root to determine when the market reverses.
Example: Trader is watching the GBP/USD bearish wave for the next 10 days: 10 to the power of 3, then square root = 31.6. Therefore, Timing in forex will appear on the 31st or 32nd of the chart. This is also a time of bullish reversal, traders should think about entering or exiting orders based on their needs.
However, this method is only suitable for markets that are less volatile or not influenced by many factors. If the results are affected by news and events, it will not be able to make accurate predictions. Therefore, investors who want to use Timing in forex to catch the bottom and catch the top should consider it.
Some popular Timing prediction methods in Forex
In order to give the best answer to the question "When does the price go up/down?". Investors can use the following analytical methods to accurately determine the top and bottom of Timing in forex:
Cyclic technical analysis
With this method, investors can use the Gann Cycle, Fibonacci sequence, astrology, horror, and astronomy to forecast the time of price movements. From there, the trader can accurately predict the time of price reversal in the future and come up with an effective entry strategy.
Based on the actual market
This method does not make a forecast, instead, it uses technical analysis to predict when the price will reverse.
Traders can use moving averages, triangles, RSI and other effective technical analysis indicators in this strategy. The more technical indicators combined, the more predictable and accurate the timing.
Based on basic information in the market
In fact, any fundamental news source in the market can influence price timing. For example, traders can expect BSR prices to increase when Dung Quat Factory opens or prices to fall in the long term with Brexit news.
Things to keep in mind when using Timing in Forex
In fact, finding the top and bottom in the Forex market is not as simple as many investors think. Timing in forex is a method that requires investors to have sufficient skills to be able to combine and use it with other trading strategies. This is a difficult method not everyone can use, traders must meet the following criteria:
Investors must have in-depth financial and investment knowledge.
Cultivate skills flexibly using candlestick charting, price charting, and technical analysis skills.
Accurately track each progress in price fluctuations.
Flexible use of many methods in parallel, absolutely does not predict Timing in forex independent, this is very easy to cause errors in finding reversal tops/bottoms.
Patiently learn and hone skills to become an expert in using the Timing in forex method.
Now you know what Timing in forex is, right? Hopefully, the knowledge of Timing in Forex will help you make accurate predictions about the effective time. From there, you can combine and use it with other strategies for more stability in every trade.
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