Best and Worst time to trade Forex


What is Best and Worst time to trade Forex? We present to you the key market beliefs about the timings for Forex trading activity. 

AtoZ Markets If you are trading Forex, at one point of your trading experience, I bet you have noticed that some days are better for trade, and some are worse. However, did you ever try to look deeper into the picture of global Forex trading and differentiate between certain bad and good timings?

The good timings for Forex trading

Best and Worst time to trade ForexEven if Forex trading markets are available nonstop 24 hours a day, it does not mean that market participants must trade constantly. Forex trading market is open for trading 24 hours a day, as we following three major financial time zones: Asia, Europe, and the US. Moreover, there is an overlapping of Forex trading market, within 2 major time zones:

• New York and London between 12 pm GMT to 5 pm GMT

• London and Asia between 8 am to 9 am GMT

I believe it is essential for every Forex trader to understand the timings of the Forex market. Moreover, it is necessary to learn how to make the best use of the trading time. Even though Forex market is open 24 hours a day, the levels of trading activity can differ drastically.

Additionally, each and every currency pair is in profit according to their respective time zones. For instance, the trading activity for EURUSD will appear at its peak at the time when New York and London Session overlapping. Following on this, the same pair will see the lowest activity in the Asian session.

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Best time for Forex trading

Overlaps are the success!

Taking into consideration an experience of a number of traders, we can conclude the following: the best hours to trade Forex is in between the time when multiple trading sessions overlap. The reason being is that this is the peak time when there is the best price action, liquidity and volatility in the market.

Monday afternoon is the way to go

Best and Worst time to trade ForexMoreover, there are best days for Forex trading. As per the currency pair’s volatility, it is noted that the first half day of Monday is not the best time to trade Forex. This is due to the fact that the beginning of the week starts slowly until the overlapping of New York and London session. The latter happens as a result of market participants analyzing the current situation in the market. Afterward, everyone slowly starts opening positions in the market and placing open orders.

Straight after this, the Forex market gets into action and the trading activity is at its peak. The liquidity and volatility are at their best will the middle of the week. The levels are again decelerating on Friday, where everyone starts to close their positions. This implies that no fresh positions need to be created after the London session ends of Friday.

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Worst time for Forex trading

Lazy weekends

As for the worst time to trade Forex, the first comes late Sunday and half of Monday, as mentioned before. At this period of time, everyone is still slow, sleepy and or re-assessing/forecasting the market direction ahead of the trading week. Nobody trades on weekend, and you should not.

Major news releases

Best and Worst time to trade ForexThe other worst period for Forex trading includes major news releases, whether it is financial reports, economic data, or political updates. Such major news can have an unexpected and unpredictable effect on Forex market. Such releases can be easily tracked in Forex economic calendar. In case you are not following this news, you are risking your funds.

Inadequate price action

There may be some times when a currency pair is trading in a strange price action. This implies that the price is surging or indicating random moves. In this period it can be very hard to understand the cause for such sentiment. It is better to wait out till the bizarre trading finishes.

Fridays

Most of the traders close their Forex positions on Friday. This is done in order to avoid the opening gaps of Monday. The traders prefer not to hold any open positions over the weekend, as the liquidity and market are on the slowdown.

December & Summer Holidays

While setting up your own Forex trading plan, it is vital you take the holidays into the consideration in order to take the best out of Forex market. Forex trading markets are not working during Major Christmas, New Year and summer holidays. So you might want to rest as well!

Should you trade Forex on your own at all?

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