Best Times to Trade the Forex Markets: A Guide

It provides a comprehensive view of prevailing market conditions and allows you to easily identify support and resistance levels. Contrary to bear markets, a bullish market structure can be identified through a pattern of higher highs and higher lows. Central banks also have the power to affect currency prices using policy tools, such as lowering interest rates. For these reasons, a bearish market structure always has a downward trend, with occasional short-term rebounds. A bearish market structure represents a largely negative market sentiment. In this type of market structure, sellers are the dominant market force.

During price breaks, the price action breaches the previously established support levels if it’s a downtrend or resistance levels if it’s an uptrend. However, just because the price of a currency pair is moving in one direction or the other doesn’t mean it is already in an up or downtrend. On the other hand, resistance levels are the points where traders’ desire to buy an asset starts to decline while their desire to sell goes up. For instance, a retail trader may buy the EUR/USD pair, expecting the euro to gain strength against the US dollar (USD).

Sydney Market Hours – 11:15 pm – 5:15 am (GMT)

Of course, this session is ideal for the European trader, and it is also not too bad for the Asian Trader who can trade the European session during his evening (3 pm to Midnight, Hong Kong Time). Currencies like the Euro, British Pound and Swiss Franc are most active during this session as traders from the European countries use their domestic currency in their foreign exchange transactions. It is great that Forex is a market that can be traded around the clock, 24 hours, 5.5 days a week, 12 months a year. Being open all day and most of the week brings to the market a greater liquidity than otherwise, and it gives traders from around the world the flexibility to trade when they want.

Trends

Yes, thismarket operates 24 hours a day, five days a week, across different global trading sessions. The New York session is the second-largest Forex trading session and starts at 1 PM GMT, ending at 10 PM GMT. This session overlaps with the last few hours of the London session, which is typically when the market sees the most significant price movements.

• Short-term gauges do not appraise the influence that long term factors will have such as increased government borrowing and mass unemployment.
• Besides, trading during peak times, especially when major markets overlap, opens the door to increased market activity and better profit potential.
• It’s not only important to trade on the best days of the week, but also at the right time of the day.
• The foreign exchange market is a global decentralised market, which means that it is open 24 hours a day in different parts of the world.
• The most active market is during the European session, as almost half of the major currency pairs such as EURUSD, GBPUSD, and USDCHF are traded during this major market session.

Which Forex Market Is Open 24 Hours?

More specifically, it is tied to the Chicago Mercantile Exchange and a web of others throughout the U.S. and abroad. We earn commissions from some affiliate partners at no extra cost to users (partners are listed on our ‘About Us’ page in the ‘Partners’ section). Despite these affiliations, our content remains unbiased and independent. We generate revenue through banner advertising and affiliate partnerships, which do not influence our impartial reviews or content integrity. Our editorial and marketing teams operate independently, ensuring the accuracy and objectivity of our financial insights. Lastly, it’s important to know that it is during this period where the WMR Spot Benchmark Rate is determined.

This represents a window of time during the trading day, when the market could be thin and so price spreads may widen significantly. 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. Dozens of economic releases happen each weekday across all timezones and currencies, but a trader does not need to keep track of them all.

By utilizing this comprehensive guide, traders can optimize their trading strategies and increase their chances of success in the forex market. When more than one of the four markets overlap, trading volumes are likely to be elevated, meaning there will be more significant fluctuation in currency pairs. The best times to trade forex can also be affected by other factors, such as economic news releases, geopolitical events, and seasonal changes.

How Time Zones and the Time of Day Affects Currency Pairs ⏲️

Additionally, when Sydney transitions to winter time in April, the Pacific session for a trader in Moscow will begin one hour later. So, if you’re looking to trade in volatile markets, take account of when the bigger (more impactful) movers are active. It’s clear then that it will be the British banks and funds speculating on the market. Are the most active during the day because of this, but they will play a relatively unimportant role on monetary changes. To really take advantage of the Australian forex market, consider using one of the leading Australian forex brokers.

Professional Liquidity

Below we have outlined some popular currency pairs for the average daily price movement in pips on the Tokyo market, for 12 months, from November 2018 to November 2019. The JPY/AUD pair is highly liquid during the overlap of the Sydney and Tokyo sessions. In fact, this pair exhibits the highest volatility, along the 9 biggest virtual reality stocks with being the second most commonly traded currency pair that includes the Yen after USD/JPY. The most-traded forex pairs in the London session include GBP/USD and EUR/GBP. This is most apparent once the New York and London sessions overlap – and seeing as how the European session has almost identical opening times as London’s does, this is all the more pronounced. On the other hand, when just a single market is open, the currency pairs are more likely to only move by around 30 pips.

I share my knowledge with you for free to help you learn more about the crazy world of forex trading! If you are a morning person, then you might be able to sneak in a few hours of concentrated forex trading prior to starting work. Just make sure you are fully focused and consider the implications of having a trade open when you go to work.

Best Times to Trade:

Round-the-clock Forex trading is made possible by the continuous operation of currency exchanges. These exchanges are located in the world’s largest cities, covering different time zones. When an exchange closes in one city, another opens in a different time zone, “taking over the baton.” As a result, there is always at least one Forex trading session open. However, there are periods of downtime when the market is quiet and trading volume is low. When only one market is open, currency pairs tend to trade in much tighter ranges, compared to when two major forex markets overlap. Tuesday is one of the best trading days to trade forex as the market recovers from the Monday calm.

• On the other hand, in an illiquid market, the spread between the bid and ask may be very wide and the volumes may be thin.
• The weeks around and past Christmas are as slow as August and the beginning of January is not that great as well.
• In terms of forex market sessions, many traders would argue that trading during hours of low market volatility is a bad idea.
• This is one of the most popular trading periods that sets up optimal conditions for trading the currency market.

Which Are the Most Liquid Currencies?

The forex market is the largest and most liquid financial market in the world, with an average daily turnover of more than $5 trillion. It is a decentralized market, meaning that there is no central exchange where all trading takes place. Instead, forex trading is conducted electronically over-the-counter (OTC) through a network of banks, brokers, and other financial institutions. The majority of trading activity for a specific currency pair will usually happen when the trading sessions of the individual currencies within the pair overlap. For instance, the GBP/USD will experience a higher trading volume when both the London and New York sessions are open.

In contrast, a stock exchange generally lists and trades shares of companies within a specific country, meaning each exchange follows local market hours. Holidays are another unsuitable time for trading, as global financial markets operate with limited liquidity, and sharp price spikes can lead to losses. Additionally, traders should avoid trading during the release of key economic reports unless they are prepared for high volatility. Understanding the worst times to trade helps minimize risks, preserve capital, and adjust trading strategies accordingly.