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What is The Best Time to Trade Forex Currencies?

Timing is one thing that would actually determine your success in the Foreign exchange market and that is why it is essential to find the best time to trade Forex market, the best time with regards to activity and volume of currency transactions. This is what we call volatility, when the currency market is volatile it is more liquid.

 

When is the best time to trade Forex? The most prominent time is undoubtedly the US and the UK markets, accounting for more than half of the total forex transactions.

 

If it comes to major market sessions, London , New York and Tokyo take up 75% of market activities. And trading is the heaviest when the major markets sessions overlap, this is the best time to trade.

 

Forex market overlaps are characterized by high liquidity and the probability of finding a profitable trade is very high. This is because the volume of transactions is determined by the number of markets that are open and the times during which they overlap with each other.

 

 

Best Time to Trade Forex Market Based Upon Volume and Activity

The best time to trade is when markets or trading sessions overlap this is the time when markets are highly liquid because there are more participants, which means more volume and momentum to fuel currency trends and trend breakouts. This also tends to be when economic data is released, providing the triggers for the movements in currencies.

 

European and U.S. Market Overlap: 13:00 - 17:00 GMT

The foreign exchange currency market is the most active when the two largest trading centers in the world overlap. 80 percent of the total average usually occurs during U.S. and European Trading hours. Just these percentages alone tell day traders that they cannot sit in front of the screen all day; this time alone is enough to make a good profit, the best time for trading Forex is the U.S. and European overlap which is between 13:00 and 17:00 GMT.

 

 

Asian and European Market Overlap: 7:00 - 9:00 GMT

The next best time to transaction Forex is during the Tokyo and European Session overlap when both the Asian and European traders have the opportunity to respond to European economic data. The London open is also volatile as European traders normally react to overnight developments.

 

These times when markets overlap is the time you have to target to make profits, it is the best Forex trading time for transacting on the currency markets.


THE ABSOLUTE BEST TIME FOR FOREX TRADING IS FROM 7:00 TO 17:00 GMT.

The best time for currency trading is 7:00 to 17:00 GMT, this is because the volatility is much higher and trading opportunities are much more frequent with bigger moves, especially in these 10 hours. This is when you can make 70-100 pips Profit.

The Forex currency pairs that move the most during these market hours are:

  • EURUSD

  • GBPUSD

  • USDCHF

  • USDJPY

 

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EUR/USD

During the Tokyo session, the Euro takes 15% of all volume so it is best to start watching the Euro late in the Tokyo session. It trades 39% of all volume during the London session. It can also be traded during the New York session.

 

GBP/USD

The pound transactions are extremely light during the Tokyo session. Start watching it near the end of the Tokyo session as it can start moving then. In the London session, GBP/USD accounts for approximately 23% of all trading volume. The pound can be traded in the New York session also.

 

USD/JPY

During the Tokyo session, USD/JPY accounts for approximately 78% of all Forex volume. This drops to about 17% during the London session. There are occasional days when these 3 pairs make significant price moves outside the sessions which normally have the most trading volume.


News Releases / Economic Data Releases
23:50 GMT Japan Fundamentals
07:45 GMT Euro Fundamentals
13:30 GMT USA Economic Figures

During Summer Time these news release times are 1 hour earlier.


Best Days to Trade the Forex Market

Although the online currency exchange market is open on all these 5 business days there are certain days which are considered as the best days for trading the currency market and trading during these days will give you the best trading time.

 

If you want the best time to trade the foreign exchange market and the best day to trade Forex market then statistics shows that Tuesday, Wednesday and Thursday are the best days since the maximum number of Currency transaction happen during these weekdays.

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