In yesterday’s article we briefly touched on Forex Trading Hours and when good times to trade were. I thought it was worth going into these in a little more detail.
Before we begin, if you’re still confused about the various time zones abbreviations, I suggest visiting this site here.
Firstly, it is worth saying that the hours in which you trade are ultimately decided by which part of the world you live in. e.g. if you are normally asleep when the New York market is trading then chances are you that you’re not going to start getting up at 2am just so that you’re able to trade. However, where possible it is recommended that you trade when the New York or London sessions are open.
The ultimate best time to trade is when the London / New York sessions overlap - this occurs from 0800 – 1200 EST (1300 -> 1700 GMT). The reason it is best to trade then is that this is when the market is most liquid – i.e. when the most trades occur, when the most volume is traded and hence the most fluctuations in the values of the currencies.
Failing that, if you can get the Tokyo / London overlap this is another good time to trade, although this only lasts for one hour. Overall it is best to try and trade during the London or New York sessions. The London session tends to be when the greatest fluctuations (read money making opportunities) occur, followed closely by New York. But if these are not good for you time wise then it is fine to trade during the Tokyo session or other times of the day. Just be aware that markets may be more sticky and it may be harder to make a profit during these times.
As mentioned in my previous post, the New York market closes at 1700 EST on a Friday – but the reality is that the market drops dead from about 1200 on a Friday, so there’s not a lot of point trading during this time.
Best days of the week are Tuesday and Wednesday, followed next by Monday and Thursday. When I say best, that means these are the easiest days to make money. The most difficult days to make money (easier days to lose money) are Sundays and Fridays. Fridays are very unpredictable and should be avoided. Sunday is a very quiet day and it’s best to look at negative pips if you absolutely have to get involved in the market on these days.
Avoid trading on public holidays when banks are closed in whichever country you are basing your trading in. Take a day off – you deserve it and it guarantees that you won’t lose money on these days.
Finally, try to trade on the market at the same times each day. You will get a better idea of the trends in the market you are working in and this will ultimately increase your money making skills.
Don’t have a world clock? Or just too busy to sit in front of a computer all day and trade? If you’d rather sleep than watch markets then automated forex trading software is for you – check out my personal reviews of Forex Funnel and Forex Brotherhood.
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