Seize the Moment: Best Months,Days and Hours to Trade Forex

A currency “fixing” is a set time each day when the prices of currencies for commercial transactions are set, or fixed. If any trends were established during the European session, we could see the trend continue, as U.S. traders decide to jump in and establish their positions after reading up what happened earlier in the day.

A very important element to note about the above chart is that the business hours in one major financial center — such as London, New York and Tokyo — overlap with the business hours in another. These overlaps correspond to times of considerably greater liquidity and trading volume due to the higher number of market participants currently active. Each of these forex sessions is typically given the same name as the money center city that has the business hours they correspond to. Unless interrupted https://www.bigshotrading.info/ by a bank holiday, this process would generally proceed in an orderly fashion as time marched on around the clock during regular currency market hours. The banks situated in each major or minor city involved in this cycle have normal business hours that form what eventually came to be known as a forex or currency trading session. Unlike a music festival where one act will follow another following the earlier group’s conclusion, forex session times feature overlaps with other regions.

Our forex trading hours

However, high volatility can be favourable when trading in the forex market. See our guide on risk management for more on managing volatile markets.

Because they do not involve an Asian currency, they are less active and volatile at night. As a result, for a beginner, trading in pairs such as GBP/USD or USD/CAD makes more sense. Even experienced traders can use these currency pairs for night trading by employing scalping strategies. Any strategy that works well with low volatility – scalping, automated trading programs, and so on – is appropriate for nighttime trading. With that said, the second half of Monday in the UTC timezone is when the initial surge in volatility and market overlap really begins. We said that Tuesday has almost 150% more volatility compared to Monday. Well, that increase doesn’t magically appear out of nowhere.

Forex trading hours around the world

Not only can you use the previously mentioned overlap between New York and London that lasts from 1 p.m UTC to 5 p.m UTC, but another rather long window of opportunity also appears from 6 a.m to 4 p.m. This ten-hour volatility window is the largest of its kind in the top four proven trading currency pairs that we have covered. For this reason, the GBP/USD pair is almost universally known as one of the most profitable currency trading pairs in the forex market. The market is open 24 hours a day, so you can trade when it is most convenient for you. There is also a lot of liquidity in the market, so you can trade with confidence.

• Additionally, most news and events that impact the US dollar are typically released in the early hours of the New York open.
• That’s because while these price movements and corrections are inevitable, their timing can be unpredictable.
• EUR/USD. By volume, this is the most popular forex pairing, and the currencies involved represent the two largest economies in the world.
• There is a great variety of factors, influencing these forces.

The continental currency of the European Union needs no introduction, and everyone knows the power that is shared between the US Dollar and the European Euro. Once again, this pair can also be traded at any given hour without risk. However, this pair is unique in the fact that it has two separate volatility surges during the day. First, we have the session overlap between New York and London that lasts from 1 p.m UTC to 5 p.m UTC. However, the popularity of the Euro, coupled with the fact that some traders use delayed indicators, makes a separate volatility peak appear at around 8 p.m that lasts until 10 p.m. Find out the average global currency trading volume at any given hour of the day. Remember – the higher the volume, the higher the volatility and thus also potential profits.

What is Forex Trading?

This means larger price fluctuations and lower spreads on trades that involve Asian currencies, which is a major advantage for day traders and scalpers. Liquidity refers to how easy it is to quickly buy or sell securities for a fair price. If there is high liquidity the bid/ask spread will be tighter and you can trade more without moving the market. On the other hand, Best Time to Trade Forex in an illiquid market the spread between the bid and ask may be very wide and not very deep. I general, liquid currency pairs are those that are active and have high trading volume. Due to the need to operate in different time zones, the forex market is open 24 hours 5 days per week. It starts working every Sunday at 5 p.m EST and closes every Friday at 4 p.m.

For instance, if you are available to trade from 0800hrs GMT to 1200hrs GMT , you are better off trading EUR and GBP pairs. 124/7 excludes the 6 hours from 10pm Fri to 4am Sat, and 20 mins just before the weekday market opens on Sunday night.