The Best Forex Trading Hours
- by Kate Doob
Forex trading is popular all over the world, which means that many private traders and financial institutions connect to the market at different times. Is it possible to increase your profit from trading, given this circumstance? Of course, because during the Forex market hours it is possible to observe jumps in volatility and liquidity dynamics depending on various factors:
● opening of trading sessions in the leading countries of the world
● news and press releases from various state bodies that determine the monetary policy
What Influences the Favorable for Trading Hours
You can trade forex around the clock. But experienced traders know that not all hours are favorable for trading. This happens due to several factors:
● Forex is traded by both private traders, who can do it at any time, and various companies and financial institutions. They work according to a specific work schedule, during which trading is intensified.
● The difference in time in the world leads to the fact that financial institutions of each country open at specific times.
Therefore, there are 4 main trading sessions. The most active trading time is at the intersection of these sessions: when financial institutions of one region have not yet closed, while others have already opened.
Four World Trading Sessions on Forex
● The earliest is the Australian or Sydney session (22:00 GMT). It accounts for the smallest trading volume — approximately 4%
● In two hours, the Asian-Pacific session begins after the entry of traders from Japan, Hong Kong, Singapore. This is approximately 5% of the trading volume
● The London or European trading session is the largest in terms of volume, roughly 35% of the total Forex market. It starts at 7:00 GMT
● Five hours later, at 12-00 GMT, the American or New York trading session begins, which makes up 20% of trading
What Hours to Choose for Trading
In order to understand what hours are best to enter Forex, it is important to consider the following factors:
● What currency pairs are traded. The largest trading volume is carried out at the intersection of the European and American trading sessions for a reason. After all, most traders choose a pair of EUR/USD
● Does your trading strategy require high market volatility? If yes, you should prefer the morning trading hours of a particular region of the world. It is at this time that the news accumulated since yesterday is released, and therefore the currencies are most volatile. If you haven’t figured out how to trade Forex with news yet, check out Forex for beginners.
● The level of professionalism of the trader. It is in the morning, within the framework of a particular trading session, that trading volumes are the biggest. Correspondingly, the prices sharply rise at this time. For an experienced trader, this is an extremely successful time, but for a beginner, on the contrary, it is dangerous due to the high volatility of currencies.
As experience accumulates, each trader determines for himself when it is more likely to make a profit, and when it is possible not to cope with the turbulent dynamics of the Forex market. Therefore, in the beginning, it is better to choose fairly predictable periods, and only then turn to trading during periods of increased risk.
Forex trading is popular all over the world, which means that many private traders and financial institutions connect to the market at different times. Is it possible to increase your profit from trading, given this circumstance? Of course, because during the Forex market hours it is possible to observe jumps in volatility and liquidity dynamics depending on…