This article looks at the overnight foreign exchange trading you could be completing.
There are many people who look at foreign exchange trading. When you look at foreign exchange trading you will be told about the overnight positions. It is important that you know what this means in relation to the forex market. You should also consider why some new traders find this to be a hard concept to follow. You also need to consider when the overnight trades are and why you might have them when you trade.
The Difficulty with Overnight Foreign Exchange Trading
There are some traders who wonder why people have a problem with the concept of overnight trading. To these traders this will mean that you are going to hold your trade over until the next day. While this is true to a certain extent the problem comes when you think about the nature of the market.
The forex market is open 24 hours a day during the week. This means that there is no end of the trading day and this could mean that there is no overnight time. This 24 hour trading time is what causes the confusion about overnight positions.
Having an Overnight Position
When you trade with medium and long-term trading strategies you are going to be looking at holding your position overnight. If you want to make a profit with the carry trade you will also be holding your trade open overnight. The key to completing this trading is to know when overnight starts.
The end of the trading day will vary depending on the forex broker you are going to be using. This is due to the fact that the broker will class the end of day by their location. This means that if you have a broker that is located in the United States of America they will be using the time of 5PM EST as their end of day. This is the generally accepted time for this location.
It is important that you verify with your broker when the end of day that they are going to use is. Knowing when the cut off for trading overnight positions is important. The reason for this is that if you open your position just after the cut off it will not be classed as an overnight position. This means that if you open a trade at 4:59PM EST on a Monday it will be classed as overnight on the Monday. However, if you open a trade at 5:03PM EST on a Monday it will not be classed as overnight unless you hold the trade until 5PM EST on the Tuesday.
This is something you have to keep in mind if you are going to be trading with the carry trade. You will not be able to make a profit with the carry trade if you do not have the trade open overnight.
Having an overnight trade is something that a lot of traders will have. There are some traders who will open overnight trades without needing to. However, if you are looking to make a profit from carry trading then you need to be very aware of when the end of day is.