Newbies should feel right at home with foreign exchange Sydney. The Australian dollar is now considered a reserve currency by the International Monetary Fund, meaning that central banks can now buy it for their reserves and not incur a penalty. Since Australia is one of only 14 countries in the world that has an “AAA” credit rating, many hedge funds and individuals like to buy and hold the AUD/USD and AUD/JPY for their relatively generous interest rates. As most AUD-related currency pairs have a habit of trending, figuring out which way the wind is blowing is not that difficult. All you have to do is decide if you would prefer to day trade or engage in longer-term trades. Whatever you conclude, please remember that China issues economic statistics over the weekends and staying in a trade while that is happening is not a good idea.
Newbies might want to cut their trading teeth with the help of a “”Williams Alligator”. The “Alligator” works well on any 1-hour or 15-minute chart.
Why Start Foreign Exchange Sydney?
Trading foreign exchange is fun and has the potential, through the use of higher leverage ratios, to be more lucrative – over the long run – than trading shares or bonds. Since forex is a global market, you are also not as restricted to when you decide to trade. You can open a trade in Sydney, add some more contracts right before London opens up and sell out when New York City opens for business (or vice versa; foreign exchange is nothing but flexible). In addition, you may discover that what you are learning, while trading foreign exchange, can help you with your trading in other financial fields. For instance, the use of “Fibonacci retracement arrays” is very useful in share trading.
How Much Time Is Needed For Trading Foreign Exchange Sydney?
Normally, for Sydney, the highest trading volumes occur in the morning, on Tuesdays, Wednesdays and Thursday. If you want to be really ruthless, just day trade in the morning on only these 3 days of the week. The reason why Monday is not highlighted is that many institutional traders use Mondays to have strategy meetings and are not prone to acting until they see how Europe and the US are going to open the week. This can make for thin liquidity conditions on any Monday in Asia. Traditionally, Fridays (and all weekends) are even worse. Try to never hold a trade into Friday or through a weekend. China issues statistics on some Saturdays, occasionally causing horrendous “gap downs” to occur.
Making Your First Foreign Exchange Sydney Trade
Probably the easiest trade, for a beginner, is a day trade that isn’t very highly leveraged. It keeps the duration (time) risk low while still allowing you to get an idea of how to trade the markets. For educational purposes, almost nothing beats a “Williams Alligator”. So, open up a 5-minute chart of the AUD/USD (picked because it has a tendency to really move) and put a “Williams Alligator” indicator up on the chart. You’ll notice that it has 3 lines and the line closest to the prices moves the fastest. That’s your signal line. When it crosses all the other lines, you trade in the direction of the crossover (and stay in the trade until the next full crossover).
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