One of the main advantages of the Forex market is that trading on it is open around the clock and is conducted in several time zones. A natural question arises about what time of day and days of the week are most profitable. By understanding the market hours, traders can determine the best time to trade the Forex market successfully.
- Time is a Forex Traders Best Friend
- Best Months and Days to Trading
- Time to be Careful
- Knowledge is Power
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Time is a Forex Trader's Best Friend
The Forex market has four trading sessions that follow each other from Monday to Friday with a weekend break. All trading sessions last 9 hours except for the European market, which works 8 hours.
Forex trading sessions:
- Sydney (or Pacific) from 22:00 to 7:00 UTC.
- London (or European) from 8:00 to 17:00 UTC.
- Tokyo (or Asian) from 23:00 to 9:00 UTC.
- New York (or American) from 13:00 to 22:00 UTC.
It is worth considering that the activity of trading throughout the day is far from being the same. Between each session there is a period of time when trading is conducted simultaneously in two sessions.
Intersection of Trading Sessions on Forex
During the simultaneous operation of two sessions, increased trading volume and volatility are observed in the Forex market. The intersection of trading sessions is the most liquid time of day for trading in the forex market for a trader.
The most incredible volatility is observed at the intersection of the London and New York sessions. This is because the US dollar and the euro are the two most popular currencies to trade. The junction of sessions takes place over 5 hours from 13:00 to 17:00 UTC.
The second most volatile trading session, from 2:00 to 4:00 UTC, occurs between the Sydney and Tokyo markets.
From 3:00 to 4:00 UTC in the morning, simultaneous trading occurs in the London and Tokyo markets. However, the one-hour crossover does not provide the opportunity to create high volatility. In addition, most US traders are not active at this time.
Best Months and Days to Trade Forex
Understanding the markets and their interactions will help a trader organize his trading schedule. However, some nuances should not be ignored these days of the week.
Monday is the first and quietest trading day of the week. If important world events do not take place at this time, then low market volatility and wide spreads will remain on this day. Also, holiday market closures are most often observed on Mondays. For more information about the work of exchanges around the world during holidays, see our special materials such as this one.
Tuesday and Wednesday are days of activity in the Forex market. For experienced traders, the middle of the trading week is the best day to trade the forex market.
Thursday and Friday are exciting days for a trader. The economic calendar is full of information about news, holidays, and other financial data. The impact on the Forex market on this day can be mixed.
How Month of the Year Affects Profit
Here is a breakdown of the best months for trading on Forex.
From January to May is a potentially good time for making financial transactions in Forex. The end of the New Year and Christmas holidays create favorable conditions for investment.
The flattest time, from June to August, is the time of the least volatility. This sets the stage for successful Forex trading due to low volatility and in preparation for the Autumn months.
Many market participants seek to improve inefficient trading periods between September and December. The desire to get a positive balance leads to increased market volatility.
The market situation can change dramatically depending on the trader's strategy and the influence of world news and events. The key to successful trading in the Forex market is to always be on the alert. If you want to trade on any day of the week, then Crypto trading with Olymp Trade can be a great solution.
Time to be Careful
The best times to trade Forex require vigilance and preparedness. Following some simple rules will help increase the efficiency of your trading.
- Monday morning is a period of uncertainty and instability, as it is difficult to determine the trend during the opening of trading. It is better to wait out the period of uncertainty for a couple of hours.
- During the release of important economic news, beginners shouldn't trade since it is difficult to forecast the movement of the trading trend. It is better to wait for the market reaction to the news.
- Unless your trading strategy requires high volatility, avoid trading session crossover times. High volatility is not always in the hands of a trader.
- Holidays affect the trend, which means that this is not the best time to trade in the Forex market.
Knowledge is Power
Knowledge of the features of Forex trading sessions gives an advantage for efficient currency trading. The trader individually chooses the best time of day to trade on the Forex market depending on individual preferences, goals and trading strategies.
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Risk warning: The content of the article does not constitute investment advice and you are solely responsible for your trading activity and/or trading results.
Coordinated Universal Time.
In finance, this is the fluctuation of asset prices in the market.