The Forex market is the world’s largest and most active financial market, with trading taking place 24 hours.
But have you ever wondered when is the best time to trade Forex market? In this article, we will explain this topic briefly to help you find the ideal time.
The best time to trade Forex and make money is when trading volumes and volatility levels are high enough to fill retail orders, and the markets are moving.
This time occurs from Monday through Friday, during a four-hour window when the two most active sessions (Europe and America) with the biggest Forex trading volumes coincide.
The four major foreign exchanges are London, New York, Sydney, and Tokyo. Forex traders should remember their trading hours, paying special attention to the hours when two exchanges overlap.
Each exchange has its own trading hours from Monday to Friday. The four most crucial time slots for the average trader are as follows:
- New York – 8 a.m. to 5 p.m.
- London – 3 a.m. to 12 p.m.
- Sydney – 5 p.m. to 12 a.m.
- Tokyo – 7 p.m. to 4 a.m.
While each exchange is self-contained, they all trade in the same currencies. As a result, when two exchanges are open, the number of traders actively buying and selling a currency increases dramatically.
Read this article until the end to know the best Forex times to trade. In addition, we’ll also cover several topics, including the best currencies to trade at what time.
Best Time to Trade Forex Market:
You may have heard that more than one market is open simultaneously in the Forex market as one region’s market closes, another opens.
In particular currency pairings, these overlapping times frequently give the most liquidity, as well as greater pip range swings.
Australian-Asian Overlap (9:00 p.m. to 12:00 a.m.)
This is the time when the markets of New Zealand and Australia collide with those of Tokyo, Singapore, and Hong Kong in Asia.
The Australian Dollar (AUD) and New Zealand Dollar (NZD) and their crosses have the maximum liquidity during this time period.
Between 7:00 p.m. to 9:00 p.m., trading in Australia and New Zealand overlaps with Tokyo, then with Singapore and Hong Kong until Midnight.
Because Australia, New Zealand, Tokyo, Singapore, and Hong Kong are all open during the overlap time from 9:00 p.m. to Midnight, this time period is considered highly liquid.
The currency pairings AUD/USD, AUD/JPY, EUR/AUD, NZD/USD, AUD/NZD, and NZD/JPY may experience a lot of activity during this overlapping time frame.
Therefore, it is the best time to trade the Forex currency pairs listed above.
European-North American Overlap:
This overlap is a crucial currency trading period when both the major Forex trading centers in New York and London are open.
During this time, trading in all European currencies is at its peak, and currency pairings including the Euro, Pound Sterling, and Swiss Franc have the highest liquidity. So it is the best time to trade Forex UK.
Furthermore, whether you are trading the EUR/USD, GBP/USD, or USD/CHF currency pairings, the market for these currency pairs will most likely be the busiest around that time.
This is because they represent the key currency pairs involving the US and European countries. It is also considered the best time to trade EUR USD.
During this, Frankfurt market is also open from 8 a.m. until 10 a.m., so it is the best time of day to trade Forex.
The Asian-European Overlap (12:00 a.m. to 3:00 a.m.)
Sydney’s Foreign exchange shuts at 1:00 a.m., but Tokyo, Hong Kong, and Singapore remain open until 2:00 a.m. and 3:00 a.m., respectively, overlapping with Frankfurt and London.
Between 1:00 (noon) and 3:00 a.m., Asian and European markets overlap at different intervals, making this an ideal time to trade to take advantage of many markets being open simultaneously.
Therefore, it is the best time to trade USD JPY. During the overlap time, the currency markets in Tokyo, Singapore, and Hong Kong continue to trade.
The Frankfurt and London stock exchanges open at 2:00 a.m. and 3:00 a.m., respectively, and trade alongside Singapore and Hong Kong until 5:00 a.m.
The EUR/JPY, GBP/JPY, USD/JPY, and CHF/JPY currency pairings may experience unusually busy activity during this time period.
Worst Time to Trade Forex Market:
Trading during the worst time may lead traders to lose all of their hard-earned money. So, before starting, consider these times when you should not execute trades in the Forex market.
Major News Events:
These might include major events, including acts of war, or terrorism. You should skip trading on these days as the market is so unpredictable.
Public Holidays:
Avoid trading the Forex market on public holidays as all the big money traders are on vacation; therefore, the market is unlikely to move. During these periods, it usually slides sideways.
Conclusion:
As a trader, knowing when to trade and when not to trade is quite an important thing.
When conditions are turbulent, or markets are volatile, it will assist you in keeping your money secure while allowing you to capitalize when the timing is perfect.
The worst time to trade Forex markets is the opening and closing days of the week, with Friday being the worst of the two. So, taking a chance before the weekend might be a dangerous proposition.
On the other hand, as Forex trading opens 24 hours, you’ll need a brokerage platform that can serve you 24/7, just like ABInvesting.
This broker offers an advanced and user-friendly platform for Forex trading with all major, minor and exotic currency pairing, accessible 24 hours.
Features like minimum spread, 24/7 customer support, and offering an advanced MT4 platform are what make ABInvesting stand out from the crowd.