Best Times to Trade the Forex Market
The forex market is open from 3 pm EST on Sundays and runs 24-hours until 4 pm EST on Fridays and is partitioned by three major sessions; namely the London/European, the New York and the Asian/Australian sessions. Anyone who has traded long enough has had the experience of opening his or her trading account to find that an excellent trade opportunity was missed. So determining what are the best times to trade, the forex market, is critical to a successful trading strategy.
The best times to trade are those times when the market sessions overlap. The combined volume of transactions, from the world's largest economies, and the timing of news releases create good opportunities to capture the largest price movements. The opening times for the three major trading sessions are as follows (Eastern Standard Time):
London/European 3:00 AM - 11:00 AM
New York 7:00 AM - 4:00 PM
Asian/Australian 7:00 PM - 3:00 AM
Since most traders and businesses execute their forex trades or transactions early in the day, the first 3-5 hours of a session seems to present the best opportunity to capture the largest moves. Notable exceptions seem to exist during earnings seasons, when companies are releasing their financial results. The market tends to wait until the end of the trading day to get some guidance on how well companies and the economy is doing and also to trade any earnings releases or forecast surprise. While this has the greatest impact on the equities market, forex traders will do well to remember that there is a high correlation between what happens in the equity and currency markets.
If the objective of the forex trader is to capture the largest price moves, the absolute best time to trade is from 2am to 11am EST. However, forex traders may find other trading times more favorable based on the time they have available to trade and their preference for a particular currency pair. For example one may prefer trading the USD/JPY in the Asian/Australian session because 78% of its transaction volume occurs at that time. Volume stats for the other currency pairs are as follows:
New York session (approximate % of the trading volume):
EUR/USD - 39%
GBP/USD - 23%
USD/JPY - 17%
USD/CHF - 6%
USD/CAD - 5%
Though it is a powerful thing to know when are the best times to trade the market, life happens, and so it is not always possible to be at one's trading station when the best trading opportunites are usually available. Try using these mobile trading apps to trade the markets with your smart phone.
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Very good tips. Thank you!
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