The best time to trade forex
As you know, the Forex market operates round the clock. It is open 24 hours, 5 ½ days a week. It is also well known that the more time we spend on forex trading, we maximize our profit. But, what you must not forget is that not every single hour of the day is a good time to trade.
Generally, it is advisable to enter into trades when the liquidity is high in the market. It helps to reduce slippage and also provides better opportunities for large market moves. These large moves definitely ensure larger profits. On the other hand, when the liquidity is low, there are relatively few active trades and the market prices are usually flat. It reduces your chances of making profit since you need market movement for that.
There are some set time patterns when the market reaches its highest liquidity. For example, during London session when the market opens at 8 a.m. GMT and closes at 4 p.m. GMT, the market experiences high liquidity. Currencies that are most actively traded during these hours are the USD, EUR, GBP, CHF, and JPY.
On the other hand, the New York session opens at 1 p m GMT and closes at 8 p.m. GMT. This is the second largest trading session in terms of volumes of transaction. The third is the Asian session that opens in Tokyo at 1 a.m. GMT and closes at 8 a.m. GMT.
Compared to the London and New York sessions, the Asian session usually has less volatility. The absolute best time to trade is from 8 a.m. GMT to 4 p.m. GMT when more than two major markets overlap.
The New York and London trading sessions overlap between 7 and 11 am (EST). The volatility is high and trading opportunities are huge with frequent bigger price movements.
So, now you know how to maximize your profits with forex trading with the most rewarding time slots!