When is the Best Time to Trade the Forex Market
Once you know how to trade in the Forex market, you might be wondering when the best times to trade are. The forex market is open 24 hours a day; hence, determining the optimal trading hours is hard. This problem is infuriated by the fact that trading strategies may be best adequate at different times of the day. Also, even different currency pairs are better traded during certain times.
Best Times Trading Forex | after success rates
Most profitable forex traders tend to trade between the 2 PM to 6 AM EST periods. This employs both the trading sessions in the Asia and US, which are in different time zones. Despite the forex market being open 24 hours a day, the duration between 2 PM and 6 AM mostly sees more action and so both higher liquidity and higher volatility. Trading during this period is crucial, continuous trading when the market is slow can lead to poor results, mainly for currency pairs that mostly do not fluctuate much.
Far from that, trading at the end of Friday or Sunday is not always a great idea because the market tends to be volatile during these days as it is the only time the market has closed.
Best Times Trading Forex | after the markets
You may want to track your chart based on the currency pairs you follow. The Tokyo market opens at 7 PM and closes 4 AM EST, for instance, this is the case when JPY trades fluctuate more. As a result, a trader trading USD/JPY may find that his most successful trades are the ones above 7 PM and 4 PM, although the hours may be a bit hard to deal with. In comparison, the London market opens at 3 AM and closes at 12 PM EST, which is the best time for variations within USD/GBP and other related currency pairs. The US market opens at 8 AM EST and closes at 5 PM EST, and that’s when a vital portion of the trade happens. For a currency pair like USD/JPY, either USD or Tokyo trading sessions may be important. For currency pair like AUD/GBP, a trader may avoid the US market hours and focus on the London market. However, the Tokyo market also has a somewhat notable impact on Australian trading.
You may have observed that the markets tend to overlap. When the market overlaps, there is an elevated amount of activity that you can use subject to your currency pairs. As in the above instances, GBP/JPY could best trade amid the narrow window of 3 AM and 4 AM EST, as this is the period when the London and Tokyo markets overlap. In addition, a trader may find that amid 12 PM and 5 PM EST as the best time to trade in USD/GBP as US and London’s markets overlap. Certainly, this also implies that every time that one of the two countries is going through economic hassle will affect the market, so traders still need to be cautious with trades they are entering. When markets cross, traders must be heedful about current news and events.
So, what are the best times to trade Forex?
As you can see, it is a bit complex. But in summary, Forex trading is essentially best between the times of 2 PM to 6 AM EST and mostly on Tuesday, Wednesday and Thursday. But certainly, every trader is different and not every trading strategy is the same. By studying when the markets open and closes, and how they affect each currency pair, you can figure which trading hours are best for you and your trading strategy.