We would like to start by mentioning that trading is an art for those who know how to handle it and torture for those who see it as a gambling casino. It is a profession in which you must constantly learn and commit yourself 100% to make good decisions.
It is not about guessing the price movements but about letting the market present you with scenarios in which you can benefit.
Absolutely all markets move by momentum and regression at all times. The only difference is volatility, as some move much faster, such as synthetic indices market assets, while foreign exchange market assets do so. They do it much more calmly.
There are various types of stock markets, such as Forex, Synthetic Indices, Futures, Cryptos, and Stocks, among others. In the same way, there are millions of users negotiating their purchase or sale in any of them. However, the trading sessions make the difference in making good moves.
Usually, the markets are open 24 hours a day, to make this possible, some trading sessions are opened.
What are those hours?
Asia Session: 11 pm to 8 am GMT
London session: 7 am to 4 pm GMT
New York session: 12 pm to 8 pm GMT
These are the sessions you must take into account for your operation, only that they are in Greenwich Mean Time, and you must adapt it to your country’s time.
How to use these sessions in your trading favor?
There is a theory that, in the Asian session, the price forms a range, which is neutralized by the London session, and finally, as a result of this, in the NY session, there are strong expansion movements that you can take advantage of.
Surely this will remind you of the Wyckoff method, which deals with cycles of accumulation, manipulation, and distribution; only we will associate it with the aforementioned times. It does not mean we will rely only on this for our operations. However, we can use it as a confirmation that contributes to our analysis.
These cycles are repeated daily with all assets. For this reason, although good movements are also generated in Asia, many traders prefer to operate in the NY session, explicitly looking for expansion movements.
How do we apply this in practice?
Important movements occur at each hour. In the Asian session, the price will form a range, which in this case, we see in the form of accumulation with equal highs and lows. When we see something like this, it is because there is a lot of liquidity injection, which means that the price at some point goes to neutralize that area. In the London session, we see that accumulation being broken up.
Consequently, the price makes a structural change because, at the time of its retracement, it did not respect the colored “demand” zone for purchase, implying that the trend will change. If it came from an uptrend, this marks a downtrend. Finally, the price returns to look for some area of interest in NY to give us an expansion movement in sales. This was an example of sales. The same is true for a purchasing scenario, just in reverse.
Let us remember that before giving us the movement, the price must first obtain liquidity, then structural failure, and now to seek our entry in New York, without forgetting patience, to wait for our confirmations for a safe and low-risk operation.
So, it is not a question of guessing what will happen to the market but of waiting for it to present us with scenarios that give us opportunities to enter. This is also often called “AMD pattern” for the acronym of “accumulation, manipulation, and distribution.”
It should be noted that we must use the logic of the market, that is, we must know what is happening with the structure of the major trend, to know with more certainty the direction of the price.
Adding the logic of the market, the price would make a breakdown, forming a new bearish momentum, to then give its respective upward retracement, so we would expect that by going in search of a selling point of interest, it would have to give us a new bearish momentum
Suppose we apply the AMD pattern, the last reflected day, just where some boxes are marked indicating what the price did in each trading session of that day. In that case, we show that, in Asia, a range was formed, but this time from upwards, the same is liquidity, which in London is neutralized, because it breaks upwards.
Conclusion
The market has an asymmetry, for which there will always be a reason why it acted in some way, so we must wait for it to form scenarios to take our entry, but not guess where it is not.
The trend will always be our friend, so it is important to take into account what happens in longer time frames, to obtain the most optimal market direction since everything is fractal.
We can add AMD to our strategy as further confirmation to make good moves. Every day the price repeats these cycles of accumulation, manipulation, and expansion over and over again.
This is the reason why New York is the favorite session for traders, it does not mean that as soon as New York opens you enter, you have to know how to wait patiently for the rules and above all be disciplined.
“We don’t have to be smarter than the rest; we have to be more disciplined than the rest.” – Warren Buffett
