When Is The Best Time To Trade Forex

When Is The Best Time To Trade Forex – In this lesson we tell traders when is the best time to trade in the forex market. Important Forex Trading Sessions and Asian Sessions We identify the most suitable business opportunities as they arise.

As a forex trader you know that the forex market is open 24 hours a day. In this article we provide a more accurate time in front of the computer to increase the chances of price movement and effectively monitor the forex market for trading. Traders should be able to know the best time for the highest possible pipe strength. We also set some guidelines for trading outside of the main trading period and volatile news drivers can cause more movement. Forex trading hours are Sunday evening through Friday afternoon, USA time. There are two main forex trading sessions, the Asian session and the combined European and American session, which we call the main session.

When Is The Best Time To Trade Forex

The above figure illustrates the time when various equity markets around the world are open relative to the main trading period. The Sydney and Tokyo equity markets represent and overlap the forex hours of the Asian session. The hours of the London Stock Market and the New York Stock Exchange overlap the main trading hours. We have heard some confusing terms that are made for traders like London Session Forex Time or New York Session Forex Times. The main trading period overlaps the two. The main trading period is about 5 hours of trading time, starting about 4 hours before the US stock market opens about 1 hour. This is the best time to enter Forex trades.

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In the Central Time Zone USA, the New York Stock Market opens at 8:30 AM, so the main session from 4:30 AM to 9:30 AM is your best time to trade Forex and trade entry points.

In the Eastern Time Zone USA, the New York market opens at 9:30 AM. opens on, so the main session is from 5:30am to 10:30am so that’s your best time to trade forex and trading entry points.

These are the best forex trading hours for trade entries in the main session. Take the same logic and apply it to your time zone if you live in a different time zone around the world. You need to know when the New York Stock Exchange opens in your time zone to estimate when the main session is in your specific time zone. In some cases EUR, GBP and CHF news drivers precede the main session and these news in the financial news calendar are good for driving potential trade entries.

See details below. The tops of the chart represent market volatility and participation in the Asian session and participation in the main session. Most of the activity and market participation occurs during the main trading period hours on the right. Because all markets are open during the main session: commodity markets, futures markets, options exchanges, and European and American equity markets are open at the same time.

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About 80 to 90% of activity in the spot forex market occurs during the main trading session. About the same percentage of good sustainable trade entry points occur in the main session. A sustainable entry is defined as a movement of 75 to 100 pips or more and gives you the freedom to close some positions during the ride and manage your money well. If the pair is trending on the remaining positions. Or you can stop trading altogether if you are in a non-trending or volatile market. For more information on trade entries we have a great illustrated article that discusses more criteria for entering forex trades.

Due to high market participation and liquidity, movements are stronger during this period. Trading volume and liquidity are much higher than Asian market hours. Durable trade entries can take place every day 5 days a week during the main session. If you trade on the H4 timeframe or in the direction of higher trends, you can usually stop further entries if you get a good entry signal from our heatmap tool. which is discussed below.

All 8 currencies we track can move during the main trading session. USD, CAD, EUR, GBP, CHF, JPY, AUD and NZD can all make strong moves in 28 pairs. Trade entries can be reviewed with our excellent real-time trade entry management system, Forex Heatmap®.

In the above example, GBP weakness is driving the market during this trading session. If this is a new move after a period of consolidation in EUR/GBP or GBP/CHF, you may have a valid entry. Movement can also be initiated after the GBP news driver in the news calendar. Entering fresh moves starting in the main forex session, after a consolidation cycle, ensures a high level of success. During and immediately after this critical 5-hour window for trade entries, there is plenty of news you can monitor on the global economic calendar.

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Due to the high liquidity and market participation in the core trade, traders should consider breakouts, any new movement cycles, higher timeframes or trend continuations on day trades. Additional liquidity provides more flexibility to traders during this trading period.

Sometimes the EUR, GBP or CHF pairs start to move slightly ahead of the main forex session. Generally these pairs are fine for trading, especially if some news or strong emotions are driving the move. Always check the Forex News Calendar for specific news drivers and the exact news times for those currencies. Pips are possible in 28 currency pairs including EUR/USD daily during this trading session.

New Forex traders are not advised to trade during the Asian trading session. Most volatility is too low for any good, sustainable trade. Remember, a sustained entry is defined as a move of 75 to 100 pips or more. A good sustained trade entry during Asian market entry occurs approximately every 8-10 days or approximately 3 times per calendar month. Rest of the time you will be scalping or trading for about 1 hour or less. So most of the time the risk/reward ratio is very low.

An exception to the forex news calendar is following major AUD, NZD, or JPY news drivers. See the following examples highlighted in red. Some important news drivers are arriving at pre-scheduled times this session. News drivers such as the unemployment rate and GDP can add to price movements. So these times can be good for potential trades in this session. This happens a few times a month.

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There is another situation where trading is possible in this session. A new trend cycle starting at or above the H4 time frames or a breakout of support or resistance on one of the higher time frames occurring in the session. Merchants can set them up for free.

New traders should avoid this session altogether, then after about six months to a year of successful entries in the main session, trading in this session will bring you extra pips. By then you will have enough experience watching the market to know when and how to trade during that trading session. Is it possible to make pips in an Asian session? Yes, of course it is. But proper news and trend setups don’t happen a few times a month. The rest of the time the moves in this session are too few to trade with a good potential reward. In this session, traders will focus mostly on NZD, AUD and JPY pairs due to their geographic location.

® During the main trading session, Heatmap can be used to validate trade entries in 28 pairs and 8 currencies. A heatmap can also be used in an Asian trading session to validate trades made during that period. A heatmap has two separate sets of readings and is divided by trading session.

Here is an example of heatmap signals and our trend indicators. In the above news calendar example, you can use a strong heatmap signal to trade the Asian session after the NZD GDP news driver is highlighted in yellow. NZD news comes out, then NZD starts to weaken. Various trades are then possible such as selling NZD/USD or NZD/JPY.

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Heatmaps are organized like forex trading sessions. There is one heatmap for trading all 8 currencies in the Asian trading session, and a separate heatmap for trading in the main trading session, which is very logical.

Concussions – The best time to trade the Forex market is during the main trading session. Some trades can also be done during the Asian session. Asian sessions are less frequently traded and must use more stringent entry rules. The Forex market is actually a 24-hour market, but

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