The way financial markets and prices of financial assets move often follows a certain rhythm and very specific rules. Furthermore, depending on the time of day and the general market environment, the way prices move can change significantly with very clear patterns.
Volatility, momentum and expectations
The reason why it pays off to be aware of the time of day you are trading in and the implications for financial markets is that you can often see significant differences in the way price move. An experienced trader, thus, adapts with his trading style based on the general market environment.
- Changes in volatility are most obvious and financial markets often follow a specific rhythm that we will explore later. During the most active times, volatility often picks up strongly and then drops off in lesser