Selecting the right trading session plays a great role in your trading performance. Most of the time, the naïve traders don’t even understand the importance of different trading sessions. Eventually, they end up trading the wrong asset at the wrong time. To make things easier, let’s give you a simple example –
Imagine trading the GBPUSD pair during the Asian trading session. The market volatility will be very low and you won’t find any good trade setups. Even if you manage to find one good trade setup, you are not going to make a decent profit since the market activity will be almost zero. You need to trade the GBPUSD pair during the London or New York trading session so that you can utilize the market volatility.
There are four major trading sessions in the Forex market.
These are –
- Asian Trading Session
- London Trading Session
- New York Trading Session
- Sydney Trading Session
Today, we are going to discuss the New York trading session since the traded volume is extremely high and the market offers decent profit taking the opportunity to the retail traders. But this article is not going to be a traditional read.
We will give you some amazing tips to use the Forex bots to trade the New York trading session.
What are Forex bots?
Forex bots are often known as trading bots that analyze the price movement of the specific trading instrument to find profitable trade setups. It can execute the trade on behalf of the human or you can semiautomatic your trading bots. When it is operated in the semi-automated mode, you do have the opportunity to manually assess the quality of the trade setup.
So, how can the bots help us with the NY trading session? Well, the answer greatly depends on your bot design. First of all, your bot should have the ability to understand the four different trading sessions. This is a very simple process and all it needs to do is fetch the trading hour’s details from a reliable website. Your programmer can easily code these functions into the trading bot.
Analyzing the major pairs
The bot needs to analyze the major pairs related to USD currency during the New York trading session. If you intend to execute any trade in any cross pairs, the bot should disable your trading execution feature. With this simple future, you will be always analyzing the USD related pair during the New York trading session. Even if you forget about the New York trading hours, the bot will block any sort of trade execution in the cross pairs.
Some of the advanced bots often analyze the U.S dollar index which measures the overall value of the green bucks’ strength against the six major currency pairs. Based on the reading of the U.S dollar index, you can easily determine the performance of the major currency pairs with a high level of accuracy. But the U.S dollar index should be used only to find the direction of the trend. Never rely on its reading to find the exact entry and exit point.
Automated pivot points
Calculating the pivot point is not all hard for the bots. Your bots should have the inbuilt functionality that will calculate the pivot points. Try to look for the price action signals at the critical pivot and execute the trades. But make sure your bot gives priority to the higher time frame data while calculating the pivot points. Some advanced bots can draw the minor and major levels in the market. And if you are dealing with such bots, use the major levels to trade with the price action confirmation signals. Place the stops by using the reliable candlestick pattern formed at the critical price levels.
Maximizing your profit
By now you should have a fair knowledge about the trade execution process and stop loss. But how can you maximize the profit during the New York trading session? To do so, you should rely on the trailing stops. Most of the smart forex EAs have this inbuilt feature but you need to tweak things to improve your win rate. Instead of using a certain percentage to trade the stop, you should rely on the support and resistance level.
If the price breaks above major resistance, move the stops below the resistance for the long trade setup. Use the same principle to trail the stops in the short trade setup.
It might be tough for the naïve trades but this can be easily mastered by using the practice account. Make sure you stick the practice trading account unless you manage to make consistent profit in the New York trading session. Forget about the profit factors and focus on your trade execution process. And always trade the market with low risk so that you don’t have to blow up the trading account.