The Best Trading Hours in the Forex Market

You can see that periods of strong trader performance line up with low-volatility trading hours. Traders tend to see the best results during the Asian trading session, and the chart below shows that the Euro tends to move far less through this period. To see why volatility lines up so well with performance, we need to look at real trader behavior.

The New York session has the biggest overlap with the London session, so the GBP/USD cross can be highly liquid. Typically, the US forex market is most active just after the open of the New York session at 8am . At this time, liquidity and volatility will likely be high as traders begin opening and closing their positions according to the market news for that morning. Our data show that over the past 10 years, many individual currency traders have been successful range trading European currency pairs during the “off hours” of 2 PM to 6 AM Eastern Time .

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Now that we’ve sorted the optimum hours to trade in each day let’s complement that with figuring out what are the best days of the week to trade forex. This way we can enhance our previously figured hours and use them on these days to make the potential for more profits. The general rule of thumb here is to trade during midweek days as opposed to weekends. However, this is a general rule, and there are exceptions to this matter that we will explain below. The understanding of when is a good time to trade is also a subject of debate, and many have disagreeing opinions about this subject based on their own personal trading preference and strategy.

Because you have the greatest number of transaction and volatility during the market hour. The New York session starts from, 8 AM to 5 PM Eastern Standard Time . The New York session starts from, 8 AM to 5 PM Eastern Daylight Time . The information provided herein is for general informational and educational purposes only.

What are the best currency pairs to trade at night?

For example, a trader who prefers safer strategies usually abstains from trading in volatile time windows. However, the metric that will be used in highlighting the best trading times in this article will be based on the general consensus and the strategy that has worked for the larger part of the trading community. This is changing as interest rates have become more volatile around the world.

The USD is the cue provider during the New York session, and traders can trade all the major pairs such as EURUSD, GBPUSD, USDCHF, USDJPY, USDCAD, AUDUSD, and NZDUSD. The US Federal Reserve is the central bank to watch, as well as major US data such as Nonfarm Payrolls, Trade Balance, GDP, Industrial Production, and Retail Sales. Along with identifying the most popular trading windows to time forex trades, it’s also helpful to be aware of the most popular currency pairs that will be regularly traded among global forex traders. The more familiar you are with these popular currency pairs, the more effectively you’ll be able to consider them in your trading strategy, and understand their price activity in relation to other pairings on the market. The forex market is open 24 hours a day during weekdays, but this does not necessarily mean that you should trade forex assets at any time, or all day.

• Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors.
• Additionally, most news and events that impact the US dollar are typically released in the early hours of the New York open.
• FOREX.com, registered with the Commodity Futures Trading Commission , lets you trade a wide range of forex markets plus spot metals with low pricing and fast, quality execution on every trade.
• Overnight positions refer to open trades that have not been liquidated by the end of the normal trading day and are often found in currency markets.

Similarly, for Friday, people want to pack up for the weekend, so they don’t really want activity trade that much. In EUR/USD, you can see that the range of this pair during Sunday is 69 pips. CEO Valutrades Limited, Graeme Watkins is an FX and CFD market veteran with more than 10 years experience. Key roles include management, senior systems and controls, sales, project management and operations. Graeme has help significant roles for both brokerages and technology platforms.

These two trading centers account for more than 50% of all forex trades. To 6 p.m., trading mostly happens on the Singapore and Sydney exchanges, where there is far less volume than during the London/New York window. They spend very little time behind screens or in exchanges placing orders and such. They instead simply buy or sell at the beginning of the overlap hours and don’t spend much more time on it. So in principle, they follow the same rules as the rest of us, that is unless they have some insider information that the rest of us don’t have. Then we can expect to sometimes trade outside of conventional timeframes.

Trading forex during the New York session

No representation or warranty is given as to the accuracy or completeness of the above information. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. Any research provided should be considered as promotional and was prepared in accordance with CFTC 1.71 and designed to promote the independence of investment research. Learn forex trading with a free practice account and trading charts from FXCM. With European traders just starting to get into their offices, trading can be boring as liquidity dries up.

Generally, the US foreign exchange market is most active right after the commencement of the New York session at 8am . At this time, there will likely be both high liquidity and volatility as traders start opening and closing their trades based on that day’s market news. These and other regular economic news releases can be useful a beginner’s guide to forex trading strategies to determine which currencies may strengthen or weaken against other currencies. Understanding how such key economic indicators might impact currency pairs can help fundamental traders make better market forecasts and trading decisions. A market overlap exists when two forex trading sessions are open for business at the same time.

Best currency pairs to trade at night

Everything’s all pushed back by an hour during this winter period, so please bear this in mind. VALUTRADES LIMITED is a limited liability company registered in the Republic of Seychelles with its registered office at F20, 1st Floor, Eden Plaza, Eden Island, Seychelles. VALUTRADES LIMITED is authorized and regulated by the Financial Services Authority of the Seychelles. This report offers data on the balance of imports and exports in the United States, which carries big implications for USD and other related currencies. Unfortunately, our optimal time window does not work well for Asian currencies.

Trading with derivatives enables you to speculate on an asset’s price movements without taking direct ownership of it. For example, the Japanese Yen tends to see more volatility during Asian hours than the Euro or British Pound; these are the hours of the Japanese business day. The Forex market has a daily turnover of around $5 trillion, and the London and New York sessions still account for the majority of that turnover. If you open plenty of trades during the day, getting the timing right can make or break your trading day. Trading your preferred currency when its issuing country is open for business will typically provide the best liquidity. Trading a currency when its local market is closed may expose you to unknown market factors that could impact the currency’s relative value by the time its local market opens again.

Benefits of Sticking to a Trading Schedule

During this time, the volatility of the otherwise rather stable forex market is increased, and chances of making a meaningful profit increase in your favor. A good trading strategy can help you predict the timing of these trades with some accuracy, but no strategy is foolproof. The forex market is driven by financial reports, economic data, and political emergency updates, with the temptation being to trade when these grip the market. While doing this may put you at the heart of action, unless you have a firm understanding of how to trade the news, it’s recommend that you stay away. Updates, data, and reports can have an unpredictable effect on the forex market, especially when news arrives unexpectedly.

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If you want volatility, the best cross-pairs to choose are those that involve an Asian or Oceanic currency. In this case, currency pairs such as the AUD/NZD, AUD/JPY, or NZD/JPY are best suited for night trading. We are looking to optimize our trading strategy to include a good general principle of when to trade regardless of these sessions. Of course, we will get to specific trading pairs down the line as well.

This includes Reuters, The Wall Street Journal, MarketWatch, and other publications focused on economic news. For example, The London-New York overlap is more liquid than the London-Tokyo overlap. The same can be said for volatility levels, with the London-New York overlap usually experiencing increased volatility. Spot opportunities, trade and manage your positions from a full suite of mobile and tablet apps. From a trading standpoint, this daily fix may see a flurry of trading in the market prior to the fixing time that abruptly disappears exactly at the fixing time. According to the latest data from FXLIQUIDITY, an analytics service for the FX market, liquidity is at an optimum level around 10 am and 3 pm London time .

The New York session also features high activity, especially during the early hours when it overlaps with the open London session. Most movements are driven by the US dollar, which is the most traded currency as well as the most influential in the Forex markets. Additionally, most news and events that impact the US dollar are typically released in the early hours of the New York open. There is high liquidity and volatility in the early hours during the London/New York overlap (1300hrs GMT – 1600hrs GMT), and most assets feature thin spreads. However, volatility and liquidity tend to decrease during the latter half of the New York session.

What are the major forex centres?

For example, during daytime in the East Pacific, Asian and Tokyo sessions are in place, and that is a prime time to trade currencies of the region. Night trading may also create opportunities for traders to profit from retracement of large gains or losses in currency pairs during the US and European sessions, as they can often pull back during night trading. For example, if the EUR/USD pair ended the US session close to thetechnical resistance, it could move lower in the Asian markets overnight. However, trades should always conduct their own due diligence to identify such signals. One of the advantages of foreign exchange trading is that unlike equity markets, the forex markets are open 24 hours a day, six days a week.

For whatever financial or political reason, these currencies have decent compatibility with each other, and the volatility between them can better be exploited to earn the trader more profits. Just like the principal rules that we already outlined, these proven pairs also have their own best trading hours. So here, we will go over four of the most well-known and reputable proverb trading pairs and highlight the best time to trade them. All currency pairs can be traded overnight, but Asian currency pairs such as AUD/JPY and AUD/NZD can be the most active.

Find the approximate amount of currency units to buy or sell so you can control your maximum risk per position. The city also has a big impact on currency fluctuations because Britain’s central bank, the Bank of England, which sets interest rates and controls the monetary policy of the GBP, has its headquarters in London. London, a central trading capital of the world, accounts for roughly 43% of global trading, according to a report by BIS. London and New York overlap session is where the volatility is at its peak.