Trading the Market Zones for a Profit

Trading, Market Zones, for a, Profit, Forex Training, currency , fx trader, forex

Ever feel like the market just won’t go your way? No matter which currency you’re trading or which timeframe you’re looking at, you and the market aren’t in the same “zone” for payouts…

A major mistake I see some traders make is not knowing when to get in the market. Many times, they don’t know how to couple those prime entry strategies with knowing when to hang your hat for a few hours  and just  stay  out  of  the  market.

Some traders think it’s this ungraspable, intuitive thing that only “those mega-millions traders” have that tells them that the market’s ripe. The truth is, the market can be divided (and conquered) by mastering the “zone mentality”; i.e., being able to differentiate the active zone versus the dead zone.

Dividing and Conquering the Market

The market has an active zone, when money is flying around, the market’s alive and the profits are there for the taking. This typically happens between 2 a.m. (with the start of the Euro Session) and 12 p.m. ET. After that, the noise and hustle calms a bit until 2 a.m. the next morning when the market seems to wake up again.

Trading, Market Zones, for a, Profit, Forex Training, currency , fx trader, forex fig1Fig.1

Figure 1 shows what the market looks like when you divide it into zones. The active zone is shown below making low-to-high/high-to-low movements   alongside the choppiness of the dead zone.

For example, if the GBP/NZD is on its way bearish toward a D extension at 7:00 p.m. ET and you have 70 pips left, more than likely from 7:00 p.m. to 2:00 a.m., the market will drift bearish toward the D extension and at 2:00 a.m. it will hit the D extension and the next day the market will run bullish (fast and aggressive). During the dead zone it took 7 hours (7:00 p.m. to 2:00 a.m.) for the market to hit the D extension. However, during the active zone, it would take 3 hours to cover the same distance in the market.