#3: When is the Best Time to Trade Forex

Since many west-coast worker bees might not return to their hive until around 9 p.m. ET or so, they would be locked out of equities trading in the open market. However, under the context of forex market hours, the fun could just be getting started. Since the majority of Americans work standard hours, it frankly doesn’t make sense for equities to feature the same forex market trading hours. The Asian markets have already been closed for a number of hours by the time the North American session comes online, but the day is only halfway through for European traders. The Western session is dominated by activity in the U.S., with contributions from Canada, Mexico, and countries in South America.

This means there are fewer trading restrictions, such as when and where you can trade, unlike stock market hours, where traders are restricted to a weekday timetable with specific hours. The foreign exchange market is an example of a market that is open for trading 24 hours a day. The foreign exchange market comprises large banks and brokerage firms that trade different currency pairs, such as the USD, GBP, NZD, JPY, etc. Practically speaking, the best currency exchange hours are the time slots when you can fully focus on the task at hand. Remember, unlike placing long-term orders on blue-chip stocks, forex market hours can be brutal because plenty of action is condensed within a short period of time. Forex trading activity reaches its maximum level when the New York trading hours open and US banks begin to work, and European dealers return after their lunch break. The influence of European and American banks is similar, so no significant changes take place in Forex compared to the start of the European trading session.

What are the forex market hours?

Notice how some currency pairs have much larger pip movements than others. Naturally, these are the busiest times during the trading day because there is more volume when two markets are open at the same time. It’s important to remember that the forex market’s opening hours will change in March, April, October, and November, as countries move to daylight savings on different days. Traders often focus on one of the three trading periods, rather than attempt to trade the markets 24 hours per day. Also on Fridays, there is the chance of reversals in the second half of the session, as U.S. traders close their positions ahead of the weekend, in order to limit exposure to any weekend news. Learn how to trade forex in a fun and easy-to-understand format.

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Asia Forex Trading Hours

Closer to home, the New York session tends to feature high liquidity in the morning hours, when it overlaps with the twilight of the London session. However, relatively little movement occurs toward the afternoon hours, particularly near Friday’s closing bell. As the Forex market employs a lot of countries from different time zones, Forex is considered to work according to universal time.

• For American traders physically based in the U.S., it’s best to trade during the morning when the New York session overlaps with the London session.
• For this reason, a trader needs to be aware of times of market volatility and decide when it is best to minimize this risk based on their trading style.
• This makes sense because, during those times, all the market participants are wheelin’ and dealin’, which means that more money is transferring hands.
• As such, the price action is not usually as interesting as it is during the other sessions.
• The good news is that these disadvantages are easily cured by a well-structured Forex trading course, discipline and no small amount of practice.

In fact, I feel confident in saying that the disadvantages below are what make the Forex market one of the more challenging markets to conquer as a beginning trader. The London session is a volatile trading session where you have a lot of transaction coming through.

New York/North American Session

From an objective standpoint, the best time to trade forex is between 8 a.m. Within this period is where the London and U.S. markets overlap, effectively a marriage between the first and second biggest individual forex markets. Nations must find some relative standard New York Forex Session to gauge their currencies’ valuation. Since this search for monetary meaning doesn’t stop at one country’s time zone, forex market hours are constantly rolling. In this manner, a 24-hour currency exchange may be ideal for Americans that don’t live on the east coast.

Price fluctuations can also be influenced by hikes in interest rates or commodity price surges. Coming in second place would be the period when the Sydney and Tokyo markets overlap. While not as volatile as the trading that occurs during the London/U.S. Overlap, the former regions provide ample opportunities for professional and seasoned traders.

Europe Forex Trading Hours

Major currency pairs tend to have lower volatility compared with the exotic pairs, as when there is high liquidity, there tends to be lower volatility. Currency pairs from more developed countries tend to have lower volatility as prices are typically more stable. There is also lower supply and demand for currencies https://www.bigshotrading.info/ from emerging markets. Read more about the most traded currency pairs​ around the world. Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Spot Gold and Silver contracts are not subject to regulation under the U.S.

• At present instead of GMT standard, which is rendered obsolete, it’s widely accepted to use UTC – Coordinated Universal Time.
• Due to the large volume of trading during the London session, there are likely to be lower forex spreads​ as liquidity is higher.
• On the other hand, central banks don’t share the same motivations as forex speculators.
• As the Forex market employs a lot of countries from different time zones, Forex is considered to work according to universal time.

Knowing when this news is set for release can help you plan when to trade. Let’s take a more in-depth look at each of the sessions, as well as those periods when the sessions overlap.