What are the Best Times to Trade Forex in Singapore?
The best time to trade forex in Singapore is between 9 and 12 PM in the evening, as the London and New York markets overlap, creating the best trading conditions.
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Forex indicators are among the most misunderstood tools in finance. For many traders who plunge headfirst into this world, they represent an unavoidable concept akin to a lighthouse—without it, they believe they’d run their accounts aground.
Yet, forex indicators are not essential. They only show what is already on the chart and not some hidden, otherwise unobservable data. Their main task is to present a certain amount of data in a simplified form. They serve as tools for identifying trends, potential entry or exit points, and other important price levels on the market.
By mastering a range of technical indicators and learning how to combine them, traders can make more informed decisions, enhance their market timing, and improve their overall performance in Forex trading. Still, it is essential to note that less is often more in the world of indicators.
Moving averages are among the most popular and widely used technical indicators in Forex trading. They help smooth price data over a specified period, making it easier to identify trends and potential reversal points.
Moving averages can be used to identify trends and potential reversal points. For instance, when a shorter-term moving average (e.g., the 20-day EMA) crosses above a longer-term moving average (e.g., the 50-day SMA), it may signal an uptrend (aka Golden Cross). Conversely, when the shorter-term moving average crosses below the longer-term one, it can indicate a potential downtrend (aka Death Cross).
Invented by financial analyst John Bollinger in the 1980s, Bollinger Bands are a volatility indicator consisting of three lines: a middle line (SMA) and two outer bands representing the price's standard deviation.
Bollinger Bands on EUR/USD, Source: TradingView
The Relative Strength Index (RSI) is a momentum oscillator that measures the speed and change of price movements. It is used to assess whether an asset is overbought or oversold.
RSI on EUR/USD with bearish divergence, Source: TradingView
The Stochastic Oscillator is another momentum indicator that compares an asset’s closing price to its price range over a specified period. It helps traders identify overbought and oversold conditions.
The MACD is a trend-following momentum indicator that shows the relationship between two moving averages of an asset's price.
Fibonacci levels are based on the Fibonacci sequence and are used to predict potential support and resistance levels.
Fibonacci drawn on EUR/USD, Source: TradingView
The Ichimoku Cloud is a comprehensive indicator that provides insights into support, resistance, trend direction, and momentum.
Ichimoku on EUR/USD, Source: TradingView
The Parabolic SAR (Stop and Reverse) is used to identify potential trend reversals.
Parabolic SAR on EUR/USD, Source:TradingView
Combining multiple indicators is one of the most effective ways to enhance trading accuracy. Combining trend-following indicators like moving averages with momentum indicators like RSI or the Stochastic Oscillator can help confirm signals and avoid false entries.
However, it is important to avoid indicator overload, where too many indicators are used, leading to conflicting signals. Instead, traders should focus on complementary indicators that suit their trading style.
Consider the following approach when designing an indicator-based system.
For forex traders based in Singapore, indicator selection will first depend on their personal trading style and then on the time they plan to trade.
As Singapore's regular working hours fall into an Asian trading session, it makes sense to focus on indicators that are more useful in ranging markets—oscillators like RSI and Stochastic are useful for this purpose. Bollinger Bands are also a good choice for traders trading a ranging market with recurring mean reversion.
The moving average is probably the most used indicator among forex traders. It is a price derivative that shows the average price over a certain period, and its main purpose is to identify the trend.
There is no set number of indicators that should be used for trading, as it depends on the individual trader. Still, a general practice says that less is more, and cluttering charts with numerous indicators does more harm than good.
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What are the Best Times to Trade Forex in Singapore?
The best time to trade forex in Singapore is between 9 and 12 PM in the evening, as the London and New York markets overlap, creating the best trading conditions.
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