Trading forex in Australia can be a great way to earn extra income or even make a full-time living. However, if you aren’t careful, you could lose money instead of making it. In this article, we’ll take a look at the worst times to trade forex in Australia, so you can avoid these common pitfalls and focus instead on maximising your trading profits.
What are the worst forex trading times in Australia?
Not all seasons are equal. The worst times, or at least the times when you need to be most careful when you trade forex in Australia are;
One of the worst times to trade forex in Australia is during the summer months because the Australian dollar generally weakens due to a variety of factors such as lower demand for commodities from China (Australia’s largest trading partner) and increased holiday spending by Australians themselves. As a result, if you’re trading forex with AUD as your base currency, you’re likely to see reduced profits (or even losses) during the summer months. Of course, if you are taking short positions in the AUD, this will work in your favour.
Christmas and New year
Another treacherous time to trade forex in Australia is Christmas and New Year. The high volume of retail activity during these holidays can lead to greater volatility in the markets. Additionally, many professional traders take a break over Christmas and New Year, reducing market liquidity and making it more difficult to execute trades.
Weekends and holidays
The interbank forex market is closed on weekends, and some public holidays. Therefore any forex purchases will have to come through a retail FX dealer, normally charging a high commission. Normal market trading takes place during the week.
When you first start out
At least, this is the wrong time to be making large trades. When you are just starting and don’t have much experience with trading or understanding of how the markets work, it’s best to avoid making any high-stakes trades until you’ve built up your knowledge base and confidence as a trader.
Instead, try out different strategies and practice with smaller trades until you are comfortable with the process and feel confident in your ability to make successful trades. Once you have mastered the basics of trading forex, you can start considering more advanced strategies and tactics that may help you generate higher returns on your investment.
What are the advantages of trading during these times?
The most significant advantage of trading forex in Australia during more difficult time periods is that it can help you learn valuable lessons and build your trading skills. You will be better able to anticipate market changes, identify competitive opportunities, and make more informed decisions when trading.
Additionally, these periods may also present unique buying or selling opportunities that may not be available at other times. Whether you are a novice trader just starting or an experienced professional looking for new ways to maximise your profits, understanding the worst times to trade forex in Australia can help you achieve your financial goals faster.
How to reduce your risks when trading during the worst times
If you must trade during these worst times to trade forex in Australia, then there are some precautions you can take to reduce your risks.
Always make sure that you have a solid understanding of market conditions, including the liquidity levels and price movements at various times, which will help you better assess when it might be best to enter or exit a particular trade.
In addition, always trade with a reliable broker who can offer competitive pricing and excellent customer support. Working with an experienced, reputable forex broker can minimise risks and focus on generating consistent profits from your trading activities.
The bottom line
Ultimately, while the timing may not be everything when it comes to trading forex in Australia, choosing the right time to invest can make a big difference in your success as a trader. By avoiding the worst times to trade, you can put yourself in a better position to maximise your chances for profitability.