Forex Investing At The Right Time: How the 10 AM Rule Works

1. Sometimes it`s wise not to be the early bird when stock investing, instead wait and see what the day will bring before you take action. The 10 A.M. rule is a great example of this concept, and is an example that protects your capital. Let`s say you want to buy a stock, for whatever reason; a trend play, or a market rally that you think a currently hot sector will participate in. Sometimes it`s wise not to be the early bird when investing in forex, instead wait and see what the day will bring before you take action. The 10 A.M. rule is a great example of this concept, and is an example that protects your capital. Let`s say you want to buy a forex stock, for whatever reason; a trend play, or a market rally that you think a currently hot sector will participate in. You know that a great time to buy would be on a gap down, but the market is in rally mode and instead of gapping down, the forex stock gaps up. But buying the gap up is a bad trade. What do you do now? You use the 10 A.M. rule, and wait until after 10 A.M. for the right forex stock investing time to buy the stock. You should only trade the forex stock if it reaches a new daily high after 10 A.M. Of course, you will use stops to protect yourself, like you would on any trade. Anyone who has followed the forex market knows that the stock price will often spike up in the early morning hours, before suddenly falling and reversing into negative territory. By following the 10 A.M. rule, you avoid the risk of this sudden reversal. The forex stock may reach a new high even after 10 A.M. There is still trader attention in the stock and it has a good shot of increasing momentum. Here is an example of the 10 A.M. rule on a gap up: A forex stock closes the day at $145. The company announces the split of two forex stocks for one after hours. The forex stocks open the next day at $161. It trades as high as $166 before 10 A.M. For two hours after 10 A.M. it trades lower and doesn`t reach $166. At 2 P.M., it hits $166.50. The forex stock is now safe to buy, using the 10 A.M. rule. You can use a variation of the rule 10 A.M. to watch for a sector that is hot in the morning, and then follow the forex stocks within the sector. The forex stocks that are still making highs by midday have a high more bonuses chance of ending the day at or near their highest levels for the day. This could make them good trading opportunities. In a downmarket, this also applies to forex stocks that open at lower prices than they closed the day before. You should not short forex stocks that have gapped lower unless they make a new day's low after 10 A.M. Using the 10 A.M. rule ensures that you will never end up chasing and buying a forex stock when your chances of making a profitable trade are low. Trading is all about probabilities. The more stock trading forex trades that you do with a high chance of success, you'll be more successful. The 10 A.M. Rule is an important addition to your forex trading plan. It will help you avoid costly mistakes, and increase the number of stock investments that are profitable.