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Thread: The Best and the Worst Times to Trade Forex

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    Default The Best and the Worst Times to Trade Forex

    One of the biggest plusses that the foreign exchange market offers traders consists of the fact that currencies trade twenty four hours a day, five days a week.

    This means that you can start trading Sunday afternoon EST and continue trading non stop all the way until Friday afternoon EST. This round the clock trading feature gives traders with workaholic tendencies a perfect market place in which to operate.

    The reason this opportunity exists has to do with time zones and where markets open in different parts of the world. For example, because the day begins in the Far East, the forex market opens in New Zealand, Australia and Asia first, then Europe and then North America.

    Nevertheless, poor times to trade also exist, and so the sections below will cover the forex market's time table and the best and worst times to trade. All times mentioned will be expressed in Eastern Standard Time or EST.

    World Forex Markets Time Table

    The foreign exchange market opens with the Sydney session at 5:00 PM EST in Sydney, Australia, although some traders in New Zealand will make prices an hour earlier at their 4:00 PM open. Wellington then closes at midnight, while Sydney then closes at 1:00 AM.

    Throughout the following forex trading week, the Sydney open at 5:00 PM EST is basically the same time as the New York Session's 5:00 PM EST close the next day. In other words, when the market in New York closes on Monday at 5:00 PM, the market in Sydney opens on Tuesday morning in its time zone. This allows many professional forex traders based in New York to pass their order books on to traders based in Sydney for watching at least until the Tokyo opening.

    Two hours after the Sydney open, the forex market opens in Tokyo (The Asian or Tokyo session) at 7:00 PM EST and closes at 4:00 AM. Singapore and Hong Kong open two hours after Tokyo at 9:00 PM and close at 5:00 AM. Interestingly, the final Asian Session trading hour when the London Session opens while the Asian session is closing down, makes up one of the busiest forex trading times.

    In the European session, Frankfurt opens at 2:00 AM and closes at 10:00 AM, while the major London forex trading session opens at 3:00 AM and closes at 11:00 AM.

    East Cost North American markets open in New York at 8:00 AM and close at 5:00PM. Chicago trading is one hour later and California trading is three hours later.

    The forex trading times therefore go full circle throughout the week, and the forex market trades until Friday afternoon's New York Session closes. At this point, forex trading ends for the week. After the New York close at 5:00 PM EST, the forex market then gives its participants a weekend break to ponder life.

    This break runs for the rest of Friday, during all of Saturday and until 5:00 PM EST on Sunday when the Sydney Session opens.



    Best Times to Trade the Foreign Exchange Market

    You may have noticed when reading the previous section that at several times of the day more than one market is open at the same time. These overlapping times usually provide the greatest degree of liquidity in certain currency pairs, as well as wider pip range movements. This tends to make these more liquid periods better times to trade, theoretically at least.

    Basically, since more liquidity and a higher volume of trades will often be more beneficial to the speculative forex trader, certain times when trading is heavier in particular currency pairs can give a trader the edge needed to be profitable. This is especially true for traders using short term strategies like scalping or day trading.

    The European-North American Overlap: 8:00 AM to 11:00 AM
    This overlap is the key forex trading period when both the New York and London major forex trading centers are open for business. Trading in all the European currencies is heaviest during this period and offers the most liquidity for currency pairs involving the Euro, Pound Sterling and Swiss Franc.

    Such especially liquid overlapping times would include the important 8:00 AM to 11:00 AM period when the major trading centers of New York and London are both open for business. Frankfurt is also open from 8AM until 10:00AM.

    Also, if you are trading the EUR/USD, GBP/USD or USD/CHF currency pairs, then the market for these currency pairs would probably be the most active during that period because they represent the major currency pairs involving the United States and European countries.

    The Asian European Overlap: 12:00 Midnight to 3:00 AM
    Sydney closes at 1:00 AM, while the Tokyo, Hong Kong and Singapore stay open overlapping with Frankfurt and London at 2:00 AM and 3:00 AM respectively. This time period usually offers the most liquidity for the Japanese Yen, as well as the European Yen crosses.

    Another good time to trade in order to take advantage of several different markets being open simultaneously, is between 1:00PM and 3:00 AM as Asian and European markets overlap at different points.

    The Tokyo, Singapore and Hong Kong forex markets continue trading throughout this overlap period. The Frankfurt and London markets then open at 2:00 AM and 3:00 AM respectively, and they then overlap with Singapore and Hong Kong until 5:00AM.

    This time period can see particularly active trading in the USD/JPY, EUR/JPY, GBP/JPY and CHF/JPY currency pairs.

    The Australian Asian Overlap: 9:00 PM to 12:00 Midnight
    This is the period during which the New Zealand and Australian markets overlap with the Asian markets of Tokyo, Singapore and Hong Kong. This time period tends to have the most liquidity for the Australian and New Zealand Dollars and their crosses.

    Trading in Australia and New Zealand overlaps with Tokyo from 7:00PM and then with Singapore and Hong Kong from 9:00PM until Midnight when New Zealand closes and 1:00AM when Sydney closes.

    This makes the overlap period from 9:00PM until Midnight especially liquid as Australia, New Zealand, Tokyo, Singapore and Hong Kong are all open.

    This overlapping time frame often sees especially active trading in the AUD/USD, AUD/JPY, EUR/AUD, NZD/USD, AUD/NZD and NZD/JPY currency pairs.

    Trading Times to Watch Out For

    Between 5:00 PM and 7:00 PM, the New York forex market has closed and the only other markets which are open are Chicago until 6:00 PM and the West Coast offices of certain U.S. banks that may stay open as late as 7:00PM. You can also trade into the thinner markets in New Zealand that opens at 4:00pm and Australia which opens at 5:00 PM.

    This represents a window of time during the trading day, when the market could be thin and so price spreads may widen significantly. Basically, avoiding trading during illiquid time periods and in highly volatile markets can save you money, both in terms of your trading position and in the amount of the bid offer spread you may be quoted for the transaction.

    Other times which may not be as advantageous to trade include the Sunday night session, as well as Fridays when the market is looking forward to the weekend and so typically trades counter-trend as positions are squared.

    Another risky trading time is when important numbers such as U.S. Non-Farm Payrolls come out. If the actual number differs considerably from the market's consensus expectation, then the exchange rate can shift rapidly to discount the new information as fast as possible.

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    The best trading hours are the times when volume and volatility levels are highest. High trading volume means that more lots of a particular currency pair are being bought and sold and high volatility means that the currency pair is moving fast and trending quickly. High volume and strong volatile cause large pip movements during the best trading hours. Moreover, the spreads become narrower during high volume trading hours, and narrow spreads means lower transaction costs. i use Tickmill platform as primary use brokerage service. and appears become one of my best deal as they also provide provide flexibility in trading conditions, they’ve discounted me 10 cents per side on their commission account (so now I get 3.8 $ round-turn, instead of 4 $) just because of my passionate trading (over 150 trades monthly) with deposit over 10K which means I just got even lower transaction cost.

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    when the price fluctuates, the best opportunity to do scalping. but we should still pay attention to money management that is used to keep using the SL and TP. I now use scalping techniques in TenkoFx ECN account when prices are sideway

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    We can trade when we are in good condition, i mean, our emotion is controlled. Try to more improve our trading skills if we want to get more maximal result in forex. Then try to use demo account to make us be more ready to trade.

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    Choosing time depends on trader, He should choose a time in which he is free and can spend time without disturbance, if the markets are turbulent the its an opportunity for traders too, but it depends on your experience.

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    perhaps the best time to boost your pips gain are during news event, you may found many article said dont trade during news event, it's a discourage words comes from brokers company who cant 'handle' market price volatility during news event. while actually we can got more pips by price action strategies only, but first you have to ensure that your brokers trading condition able to handle such event, by long time research i've found my account with Tickmill are best fit during news event trading activity. typically no spread improvement during news release, and the entry order are executed accordingly.

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    Quote Originally Posted by orni308 View Post
    Choosing time depends on trader, He should choose a time in which he is free and can spend time without disturbance, if the markets are turbulent the its an opportunity for traders too, but it depends on your experience.
    Of course, as a trader, we must know and understand our condition. When we should start trading and we should stop for trading. When we should make order and when we close our orders. That's why there is demo account that can be used by traders.

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    Quote Originally Posted by ebi View Post
    perhaps the best time to boost your pips gain are during news event, you may found many article said dont trade during news event, it's a discourage words comes from brokers company who cant 'handle' market price volatility during news event. while actually we can got more pips by price action strategies only, but first you have to ensure that your brokers trading condition able to handle such event, by long time research i've found my account with Tickmill are best fit during news event trading activity. typically no spread improvement during news release, and the entry order are executed accordingly.
    what kind of news trading system do you use here, how long been use such strategies?, yes some my past brokers are bad condition when facing news release situation, I even experience freeze price quote for minutes. ECN seem best for this trading purpose, and still I read many article about slippage happen during news event, so how does tickmill react on this ? do they also had slippage? for example during NFP release.

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    Quote Originally Posted by veljia View Post
    what kind of news trading system do you use here, how long been use such strategies?, yes some my past brokers are bad condition when facing news release situation, I even experience freeze price quote for minutes. ECN seem best for this trading purpose, and still I read many article about slippage happen during news event, so how does tickmill react on this ? do they also had slippage? for example during NFP release.
    I think, for slippage, it can be avoided when news are released. That's why i usually don't trade in that moment. But some times, we also must be ready with market movement which are unpredictable.

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    Best Times to Trade:

    1)When two sessions are overlapping of course! These are also the times where major news events come out to potentially spark some volatility and directional movements.2)Make sure you bookmark the Market Hours cheat sheet to take note of the Opening and Closing times.
    3)The European session tends to be the busiest out of the three.
    4)The middle of the week typically shows the most movement, as the pip range widens for most of the major currency pairs.

    Worst Times to Trade:

    1)Sundays – everyone is sleeping or enjoying their weekend!
    2)Fridays – liquidity dies down during the latter part of the U.S. session.
    3)Holidays – everybody is taking a break.
    4)Major news events – you don’t want to get whipsawed!
    5)During American Idol, the NBA Finals, or the Superbowl!

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