Forex Investing at the Right Time - The 10 am Rule and How it works

1. It is sometimes better to wait until the morning before investing in stocks. 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. You want to purchase a forex stock for any reason, whether it is a trend-play or you believe a hot sector will be part of a rally. 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? The 10 A.M. Rule is used to determine the best time for investing in forex stocks. If the forex stock makes a new high for the day after 10 A.M., then, and only then, should you trade the stock. 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 9ma trading 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. Before 10 A.M., it reaches $166. After 10 A.M., the price drops and does not reach $166 for two hours. It reaches $166.50 at 2 P.M. Using the rule of 10 AM, it is safe to purchase forex stocks. 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 chance of ending the day at or near their highest levels for the day. This could make them good trading opportunities. This also applies in a down market and to stocks in forex that gap down, opening at prices lower than where they closed the previous day. You should not short forex stocks that have gapped lower unless they make a new day's low after 10 A.M. The 10 A.M. Rule will ensure that you never chase and buy a foreign stock when the chances of a successful trade are low. Remember, 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 a valuable addition to your trading plan, giving you a straightforward way to avoid making costly mistakes and to increase your number of profitable stock investing trades in forex.