Although the Forex market is open 24 hours a day, there are a few hours that are considered the best times to trade Forex. It is extremely important for a trader to identify these times so as to increase profit potentials. This article will not only cover the topic of Forex active hours, but also reveal the overall trader mindset towards market hours on the whole. To understand whether there is a best time to trade. From the above grid, you will notice that there are three times when trading time zones overlap.
Meaning 2 markets are traded concurrently. In Forex trading, when 2 markets are open concurrently, there is usually more volume and volatility. There are three main trading time zones. The London market opens from 3: As you can see, the Forex market is active all through the day. But, you need to acknowledge the fact that the price movements and trading volume are not uniform through all these sessions.
At times, it is best for traders to leap into the market and at other times, it is best to just stay away from it. The central idea here is to get involved in the trade when the markets are extremely busy.
Remember, all of the currencies react in different ways during every session. Therefore, it is best for you to trade in between 3 AM and 11 AM. The reason is that the New York and London market overlap during these Forex active hours, which creates loads of trading opportunities that are boosted with regular price movements. If you have a proper trading plan in place, together with a money management system, it is not hard to see profit potential up to hundreds and thousands of dollars in just a few minutes depending on your lot size.
The three hours in between 8 AM and 11 AM are particularly profitable as a number of economic releases are made between them, which can help you make substantial profits. Statistically speaking, the best times to trade Forex is on the hours mentioned above.
The best days to trade Forex are on Tuesdays and Wednesdays as the peak trades take place during these two days. Many traders do not trade on Sundays, as nothing significant really happens in currency rates. They also avoid trading late on Fridays, as the market is extremely unpredictable due to the weekend. Holidays are avoided too. Knowing the Forex active hours is only the beginning of the story. You must ask yourself these questions.
Are you a Forex Intraday trader? Are you a Swing trader? Are you a Long Term player? In the Forex market, unlike equity trading, there are very few so-called Long Term investors. Swing traders who hold their position for one or more weeks are also not too concerned about market hours. Their main concern will be for entry or exiting of trades when more than one market is open to take advantage of more volatility.
Of all the trading styles, intraday traders are the ones most concerned about Forex active hours. For Intraday traders, they will most likely prefer to be around when more than one market is open. London session provides the most liquidity and volatility.
London operating hours also overlaps two other markets, namely the Tokyo market and New York market. It is also important to trade the currency pairs that are related to the particular markets open.
The Forex market is truly a connected global market. Hopefully, the above information helps you decide what trading time is best for you. However, there is a saying that big and successful Forex traders never sleep, as the market is always open for business! You must be logged in to post a comment. Contact Us Search Login. By Market Traders Institute. Many Forex traders agree that the best time to trade Forex pairs is in the first 3 to 5 hours of all the sessions, particularly when your fundamental analysis points on the new economic calendar are released.
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