Overnight trading (night trading on Forex).
When trading on the stock exchange, many traders gradually notice that the number of successful transactions depends not only on the correct trend forecast, but also on the time of day when trading is carried out. Therefore, it is sometimes customary to divide the trading process into day and night trading.
Overnight trading (night trading on Forex) – purchase or sale of currency in the period from 21-00 to 8-00 am, taking into account local time. At the same time, it is not necessary to postpone the transaction to the next day; the main indicator of night trading is the time it is carried out, and not the duration of the transactions.
This term means that you simply trade at a certain time of the day, and absolutely any Forex strategy
Advantages and disadvantages of Overnight trading.
1. Free time - this type of trading is especially attractive for those who are busy during the day with their main job.
Once home, you can spend a few hours relaxing, and then start making money on Forex. 2. Lack of distractions - no one will call you on the phone at night, and the level of external interference is also reduced.
All this allows you to fully concentrate on work. 3. Choosing a trading instrument - night trading on Forex, or rather its morning hours, allows you to select the most popular currency pairs, while excluding the influence of external factors, for example, EURUSD, EURGBP, USDCHF, etc.
4. Communication – it is at this time of day that the load on communication channels decreases, orders are opened faster, and technical equipment failures occur less frequently.
5. Disadvantages - if we talk about disadvantages, the main one is the state of your body; after all, at night, most citizens are used to resting. You should also pay attention that not all Forex brokers provide 24/7 support to their clients.
Features of night trading on Forex.
1. Forex trading sessions - trading at this time takes place during the American and Asian trading sessions, this fact leaves its mark on the choice of trading instrument and the work strategy itself.
2. Trading instrument - it all depends on how risky the Forex tactics you have chosen as your assistant:
• Risk and high profitability - the currency pairs AUDJPY, USDJPY, EURJPY, GBPJPY, EURUSD are suitable for this option.
• Calm trading with low risk - we select those currency pairs for which the appearance of EURCHF, EURGBP, GBPCHF news is excluded at this time.
3. Strategy – you can trade at night on Forex using almost any trading strategy – scalping, channels, breakout, levels, support and resistance lines, etc.
4. Swap - be careful, if you open a transaction before 24 hours and close it the next day, a swap commission will be added to the spread amount, regardless of the duration of the transaction. Therefore, before starting trading, you should ask your broker about his time zone and the time when this commission is calculated, and close all transactions before this hour.
Night trading on Forex is no worse or better than intraday trading at other times of the day, it’s just a different time period for transactions, so you shouldn’t specifically switch to overnight trading if you have the opportunity to trade during the day.