This is very much a beginner topic, but I think it is essential to learn about the market open and close because trading mistakes made during these times can be avoided, as long as you are aware of them.
To start, I want to point out that the Forex market is not the same as the stock market in terms of when the market closes and opens.
Often as a Forex trader, the first thing you want to do is just make money without really looking at the reasons why you may not be making money, or rather the reasons for losing trades.
Now, don’t get me wrong it is vital to focus your attention on having great winners, but it is equally important to focus on the small losses…
In this game, it’s important not to have eyes bigger than your stomach. Don’t take on risk you can’t stomach. I heard of a trader called Jason Leavitt on a “Chat with Traders” podcast some years back who said at the beginning of his trading career he could’ve been trading $50,000 account and have one trade floating an $8000 loss without phasing him.
Trading, like anything in life, needs practice if you want to become good at it. Luckily, with modern technology, there are ways to practice without spending any real money. Without the added risk, trading a demo can help traders hone their skills and become better by first losing fake money and not real money.
Often, traders and investors miss the small but MAJOR details before making a decision when purchasing a stock or a certain currency. Forgetting to check the spread on a Forex pair is normal when you see an opportunity and just want to pounce, but the disadvantage is yours and yours alone.
An edge means that over a large sample of trades, a trader will come out with a profit. Without an edge, nobody can make money from the market in the long run.
The above definition is just scratching the surface, there is much more to understand about this concept.
In the simplest form, volatility is the rate at which market prices change. Large price movements equal high volatility while small price movements mean low volatility.