Identifying the Best Times Trade Forex

best times trade forex – Once you know how to trade on the foreign exchange market, you might start wondering when are the best times to trade forex… Best Times Trade Forex lets see..

The foreign exchange market operates 24 hours a day, so it can be difficult to determine the most optimal time to trade. Compounding this issue is the fact that different trading strategies may lend themselves better to different times of the day, and even different currency pairs may be better traded during certain blocks of time – best times trade forex.

There’s even a personal aspect to trading to consider, especially if you are tracking and initializing your own trades rather than following forex trading signals or tips. best times trade forex.

Best Times Trade Forex | According to Success Rates

Most profitable forex traders are able to trade between the periods of 2 PM to 6 AM EST. This takes advantage of both the United States and Asian trading sessions, which are on different time zones.

Though the forex market is open 24 hours a day, the period between 2 PM and 6 AM generally sees more action and therefore both higher volatility and higher liquidity. Trading during these times does matter — trying to trade continuously even when the market is slow could lead to poor results, especially in currency pairs that don’t generally experience significant amounts of fluctuation.

Apart from this, it isn’t always a good idea to trade at the end of Friday or at the end of Sunday. The market generally acts erratically during these hours as they are the one time the market shuts down — from 4PM EST on Friday until 5PM EST on Sunday.

Best Times According to the Markets

You may want to adjust your schedule based on the currency pairs that you are tracking.

The Tokyo market opens at 7 PM and closes at 4 AM Eastern Standard Time — this is when trades involving JPY, for instance, are more likely to fluctuate significantly. Consequently a trader that is trading on USD/JPY may find that their trades through 7 PM and 4 AM EST are more successful, even if the hours may be a little difficult to contend with.

Comparatively, the London market opens at 3 AM and closes at 12 PM EST, making this the best time to experience fluctuations within USD/GBP and other similar currency pairs. The United States opens its market at 8 AM EST and closes at 5 PM EST — and this is when a significant portion of the trading happens. For a currency pair such as USD/JPY, either Tokyo or USD trading sessions may be important. For a currency pair such as AUD/GBP, a trader may want to focus on the London open and close and forego paying attention to the United States market hours. However, the Tokyo market also tends to have a fairly significant influence on Australian trading – best times trade forex

You may have noted now that the markets do tend to overlap. Whenever the markets overlap, there is a heightened amount of activity that you can take advantage of, depending on your currency pairs. As in the above examples, GBP/JPY could be best traded between the narrow window of 3 AM and 4 AM EST, as this is the time during which the Tokyo and London markets overlap. Likewise, a trader may find that between 12 PM EST and 5 PM EST is the best time to trade USD/GBP because it’s when the London markets and the United States markets overlap.

Of course, this also means that anything that either country is undergoing economically will be affecting the market, so traders still need to be very cautious about the trades that they are entering into. When markets crossover, traders have to be conscientious regarding current events and news.

Best Times of the Week for Forex Trading

It doesn’t always come down to hourly trading; there are also some days of the week that are generally best. In general, Tuesday, Wednesday, and Thursday tend to be the most profitable for traders. Mondays are usually not very effective, and so they are often the day that traders take off. This is mostly due to liquidity and fluctuation, as the most currency trading is done in the middle of the week. best times trade forex

As mentioned before, Fridays and Sundays tend to be particularly unpredictable and difficult to trade on because they are shut down for part of the day. However, some savvy traders are able to capitalize on this; there are some pairs, for instance, that can experience a minor resurgence at the beginning of a trading week, or may begin with a downturn.

Best Times According to Scheduling

Of course, trades aren’t completed in a vacuum — the trader themselves matter, too. Often you may find that you have a specific amount of time that you can devote to trading; as long as you are consistent, that isn’t necessarily a bad thing. The important thing is that a trader commit to a certain time period and that they also give themselves a break.

There is an allure to trading that can lead to traders attempting to continue for far too long; once you become fatigued, you’re more likely to engage in risk taking behavior and it’s very possible that you can make mistakes. Your own personal schedule is just as important as the hours that the forex market is up and lively. You should make sure that you are always trading at a time when you can devote 100% of your focus to the trades that you’re making.

Distractions are the enemy of a forex trader. The most successful forex traders are able to set aside specific parts of the day and week for their trading and are able to walk away from the trading table when their schedule demands it.

So what are the Best Times to Trade Forex?

As you can see, it’s a little complex…

Just to summarize; forex trading is generally best done between the times of 2 PM to 6 AM EST and usually on Tuesday, Wednesday, and Thursday. But, of course, every trader is different and not every trading strategy is the same –

Learning when the markets open and close and how it affects each currency pair will help you determine which trading hours are best for you and your trading strategy. Forex demo accounts can help you determine which hours are best for you — you just need to make sure that you’re trading consistently or you may find that your strategy’s success is unpredictable.

The best thing you can do is find a trading time that works best for your trading style, strategy and the currency pairs you intent to trade. Regardless of when you trade on the forex market, you should be able to find a reliable strategy through careful analysis – best times trade forex.

Try reading: Choosing a Forex Trading Strategy that Suits You

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