Friday, 23 January 2015

The Best Time to Trade Forex

So you are trading or thinking about trading Forex.   Perhaps you have a busy schedule and can't seem to be there for the big moves.

What is The Best Time To Trade Forex?
Forex Market Hours (Eastern Time GMT -5)
Well, when do you have time to trade?   That would be the best time.    Granted if you can only trade in what I call the "dead zone" when the US market closes and there is a break until the Asian Session opens, you might say you cannot trade.

Dead Zone

Where there is a will there is way...   If you are unable to make a live trade then start thinking bigger picture and entry orders.   You could study the technical (and fundamentals) to determine possible "future" trades.  Either wait and monitor for those conditions, set up Alerts to notify you, use EAs to notify you (or trade), or use entry orders.   I remember a time where I started trading and my Forex Coaches didn't even know how to use entry orders (they only knew what they knew) and I ended up using them quite successfully by studying technical patterns and determining possible entry points.

Asian Session

The Asian session is said to be the slowest session and the Japanese Yen Pairs are known to have the most volatility and swings.   (Translation, use a bigger Stop Loss, and Take Profit).   It is not for beginners.    Is it for you?  It might be. There are many successful traders that prefer this session.

European Session

The European session obviously favors European Currency Pairs and does overlap with the Asian session as well as the US Session.   The latter, the end of the European Session and start of the US Session does see the most volatility and is a favorite amongst traders.  Beginners are advised to close their trades or lock in their profits (set Stop Loss to Break Even or a profit) prior to the US Session open due to volatility and upcoming US News.

US Session

The US Session Open is the most heavily traded session.  Whenever there is US News, the Forex Market moves.   Add to that the end of the European session and you have yourself a great session.  Careful though. The news can quickly see your profits tumble.   Beginners are advised to trade 1 to 2  hours after news releases.


In addition to Session Times, you should pay attention to the following:
  • Public Holidays - US, Europe
  • Festive Seasons - Thanksgiving, Christmas, Easter
  • News Releases - High Impact, see
  • US FOMC Meetings - High Impact
  • EU ECB Meetings - High Impact
  • Rate Decisions - All Currencies
  • US NFP (Non-Farm Payroll Report) - every first Friday of the Month
  • Breaking World News
  • Vacation Times - Traders need to take a break too. 
  • Lunch Times - Traders need to eat too.
  • Football World Cup - Traders love Soccer!

Day of Week

There is an old saying, never buy a car that was made on a Monday or Friday.  The thinking behind it is that Mondays people are getting back to work, after a weekend, and are just getting back into work mode.  And on Fridays people are ready to call it quits and enjoy the weekend.

The Forex Market too in my experience has the Monday blues, that is it is slow to start and finding direction.   On Fridays traders are exiting positions or taking more risk.

I have to admit I am guilty of sometimes trading Monday or Friday.  Sometimes successfully, but more often than not I make bad trades or set myself up for a lousy weekend.  Nothing worse than having a great week and then having your profits disappear on your last trade before the weekend.

Forex Market Hours

So what times do these session start, stop, and overlap?  Have a look at the Forex Market Hours website.   It adjusts based on daylight savings time and gives you a nice graphical overview.  To be honest, I still use it from time to time as I travel a lot and like to get a visual of the market hours in my local time, wherever, whenever.
Forex Market Hours (Eastern Time GMT -5)