BLOG Forex Basics Avoid Forex Trading During These Hours!
Although forex market is available 24/5 and theoretically you can trade all the time, there are certain days and hours where all the markets tend to have more action. So instead of turning into a sleep-deprived-pip-thirsty zombie, it makes more sense to carefully choose the time to trade and the time to rest.
Market Hours
The forex market can be devided into 4 major trading sessions:
· Sydney
· Tokyo
· London
· New York
Between each session there is a brief moment when two open sessions overlap:
· 3:00-4:00 am EDT, the Tokyo session and London session overlap
· 8:00-12:00 am EDT, the London session and the New York session overlap
During the so-called overlap, more traders are involved in currency exchange and therefore this is the busiest, most profitable moment.
When to Trade?
The middle of the week is the most interesting and filled with exciting news and data release. The best of it all happens when two different sessions merge together into one! This is where any news releases may trigger serious volatility and trend movements.
The best time to trade is when two sessions overlap. This is when major news events come out and bring up volatility and trend movements.
The best session overlap happens between 8am to 12pm EST. That’s when US-European sessions meet each other creating small but very powerful window of opportunities. Many traders create substantial income from only trading during these hours.
Fridays are filled with profitable opportunities until about midday and the last 5 hours until the market doors are locked till next week are very quiet and therefore extremely boring. So instead of wasting your time in front of the computer, get together with your friends, go for a picnic with your family or chill out as far away from your trading environment as possible.
When to Avoid Trading?
The least interesting session is European-Asian crossroad which runs from 2am to 4am EST. If you aren’t sleeping (or napping) during these hours, try to avoid trading because the volume of trades is very insignificant and the trend is basically non-existent.
The best thing you can do is to wait out for European session to start. It is the busiest session out there, so take advantage of it.
