Knowing exactly what the best times to trade Foreign exchange is an important part to reliable and effective Forex trading.
During the trading week, the Foreign exchange market is open 24 Hr a day. However, just because it is open around the clock does not indicate prices are constantly changing in a way that makes certain markets worth trading. Money is made in the Forex market when the marketplace is unpredictable and moving, not when the marketplace is calm and reasonably quiet.
The two most active Foreign exchange sessions are the London session, and the New York session, during these sessions cost action offers the best trading environment. The Eastern trading session is typically less unpredictable and thus less likely to lead to significant moves within the numerous Forex pairs.
The Forex market consists of three unique trading sessions. Trading starts in Australia and Asia, and moves the globe into Europe and finally ending the day in North America as trading closes each day in New York. The various Forex trading hours are as follows:
- Asian trading session (consisting of Australia and New Zealand): the Eastern trading session opens at 6:00 pm EST and closes at 4:00 am EST.
- London trading session: the London trading session opens at 3:00 am EST and closes at 12:00 pm EST.
- New york city trading session: the New York trading session opens at 8:00 am EST and closes at 5:00 pm EST.
As you can see from the above list of times to trade Forex, there are periods daily where the sessions overlap each other. It is within these durations when volume and volatility typically rise to peak levels. The London and New York City trading sessions overlap between 8am and 12pm EST; this is typically thought about the best time to trade Forex. The reason it is considered the very best time, to trade, is since this is when the world’s two most active trading centers cross. As London trading comes to an end, New York trading is opening, and they are both open at the same time for 4 hours each trading day. As an outcome, lots of traders strictly trade within this 4-hour window since it normally brings the very best liquidity and volatility.