If you’re considering trading Forex for a second source of income, there is no doubt that you’ve thought about what time to trade. Some trade before work, others like lunchtime, or perhaps you like to fully focus on the markets during the evening.
The Forex market is available 24/7, which allows you to be flexible about your trading times. But what time is the most effective?
Understanding the market hours
Trading hours are determined when each participating country’s exchange is open. There are four major markets to be aware:
- Sydney: Opens at 5 p.m. EST and closes at 2 a.m. EST
- Tokyo: Opens at 8 p.m. EST and closes at 4 a.m. EST
- London: Opens at 3 a.m. EST and closes at 12 p.m. EST
- New York: Opens at 8 a.m. EST and closes at 5 p.m. EST
The best times according to experts
When two sessions are overlapping. Three overlaps during the day include:
- U.S./London (8 a.m. to noon): More than 70% of all trades happen when these markets overlap. The U.S. dollar and the Euro are the two are popular currencies when it comes to trading.
- Sydney/Tokyo (2 a.m. to 4 a.m.): Experts suggest the EUR/JPY as the best pairing during this time.
- London/Tokyo (3 a.m. to 4 a.m.): Not much action as most US-based traders are asleep.
The middle of the week also shows the best movement so consider this when looking for a time to trade.
The worst times
Try and avoid:
- Sundays – Weekends are slower
- Fridays – People are preparing for the weekend
- Holidays – People are taking a break
- During major news events – Major news cycles could influence the markets.
There are times that might work to your advantage but the best time is up to you. You need to consider your trading style, strategies, and trading goals. Once you have this figured out, you can determine the best time for YOU.
For more information on how to find your trading style, book your FREE seat at our financial trading seminars.