Best Time to Trade Forex the Best Hours for Forex Trading

Generally, the US foreign exchange market is most active right after the commencement of the New York session at 8am . At this time, there will likely be both high liquidity and volatility as traders start opening and closing their trades based on that day’s market news. By looking at the average pip movement of the major currency pairs during each forex trading session, we can see that the London session has the most movement.

At these times, less money goes to the market makers facilitating currency trades, which means traders can pocket more. Popular forex pairs to trade during the London session are the majors such as the GBP/USD cross or the EUR/GBP cross. This is especially true during the overlap between the London and New York markets, as well as the European session which is open during almost identical hours to the London session.

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London is a major global financial hub and is used as the reference for all major European financial centres. The London session is characterized by massive liquidity and high volatility.

Now that we’ve sorted the optimum hours to trade in each day let’s complement that with figuring out what are the best days of the week to trade forex. This way we can enhance our previously figured hours and use them on these days to make the potential for more profits. The general rule of thumb here is to trade during midweek days as opposed to weekends. However, this is a general rule, and there are exceptions to this matter that we will explain below.

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For example, during daytime in the East Pacific, Asian and Tokyo sessions are in place, and that is a prime time to trade currencies of the region. The best time to trade currencies is typically when the market is most active and liquidity is higher. In the hours when more than one of the major markets is open and there is an overlap in trading activity, currency values tend to fluctuate more, creating opportunities to speculate on volatility. These and other regular economic news releases can be useful to determine which currencies may strengthen or weaken against other currencies. Understanding how such key economic indicators might impact currency pairs can help fundamental traders make better market forecasts and trading decisions. A market overlap exists when two forex trading sessions are open for business at the same time. There are numerous financial centers in which currencies trade, but the four key money centers mentioned earlier are by far the largest and most important.

• Bitcoin, of course, is not going anywhere any time soon, still being the world’s most expensive altcoin.
• When you’re trading FX, it’s important to remember you’re speculating on two currencies, so you’ll need to monitor market movers in each country.
• Find out the average global currency trading volume at any given hour of the day.
• For example, EUR/USD and GBP/USD will see increased activity as New York gets into its stride while London is still fully active.

At this time, liquidity and volatility will likely be high as traders begin interacting with each other. Trading will usually become less liquid at around 10am , and it will pick up again after the American markets open at around 12pm . While not as volatile as the U.S./London overlap, this time span also provides an opportunity to trade during a period of higher pip volatility. Since these are the two key currencies affected, EUR/JPY is the best currency pair to strive for. Suppose we are going to be spot on with our estimation that Tuesday and Thursday showcase the most volatility during the week. This is because many traders who start their trades don’t bother to carry on all night into the next few days.

Forex trading hours: the opening times of the forex market

In general, the more economic growth a country produces, the more positive the economy is seen by international investors. Investment capital tends to flow to the countries that are believed to have good growth prospects and subsequently, good investment opportunities, https://www.bigshotrading.info/ which leads the country’s exchange strengthening. The city also has a big impact on currency fluctuations because Britain’s central bank, the Bank of England, which sets interest rates and controls the monetary policy of the GBP, has its headquarters in London.

However, just because you can trade the market any time of the day or night doesn’t necessarily mean that you should. Most successful day traders understand that more trades are successful if conducted when market activity is high and that it is Best Time to Trade Forex best to avoid times when trading is light. Not only can you use the previously mentioned overlap between New York and London that lasts from 1 p.m UTC to 5 p.m UTC, but another rather long window of opportunity also appears from 6 a.m to 4 p.m.

Trading Sessions

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Worse, many don’t take into account the different holidays and daylight saving transitions which results in ineffective or money-losing trading decisions. To take advantage of the best opportunities, pay close attention to the economic news releases that could impact your chosen currency market, and are relevant to you. Some forex brokers focus on offering quality research tools and data to help with this. Just like with other markets, there isn’t an “ideal” period for trading forex. Of course, there are some times that are more full of opportunities. More specifically, there will be times when a certain currency pair or trading style is more advantageous than others. Below we have outlined some popular currency pairs for the average daily price movement in pips on the Tokyo market, for 12 months, from November 2018 to November 2019.

Just because currencies may be traded 24 hours a day doesn’t mean all trading hours offer equal opportunities, volatility or liquidity. Understanding the advantages and disadvantages of each time frame during the forex trading day can make a significant difference in your forex trading success. Other forex trading hours to watch out for are the release times of government reports and official economic news.