As a forex trader who wants to make high profits, you must add in your responsibilities to check the best and worst times to trade. Choosing the correct times of day to enter and exit trades can mean the difference between making money or losing it.
Let’s go over exactly how the market works when you should be entering exiting trades for maximum returns and how it all impacts forex news.
How does the forex market work?
Forex is a huge and liquid market where people trade different currencies. When you trade, you buy one currency and sell another simultaneously. Usually, people use a broker to do this – it is a company that provides all the tools you need to trade.
The Forex market is open 24 hours a day, so opportunities to profit from currency exchanges can arise anytime. For example, if one currency is strengthening while another is weakening, traders may buy the stronger currency and sell the weaker to profit from their value differences.
Forex market hours
The Forex market is open 24 hours a day, but this doesn’t mean you should trade at any time. The market volatility varies during different times of the day because of different trading sessions.
To trade forex most profitably, you should understand the different trading sessions and when they take place. Here are they:
New York session
The second biggest forex platform in the world is the New York Exchange. It is available from 8 a.m to 5 p.m and is closely watched by foreign investors.
London
London is a major global trading center, with around 43% of all worldwide trades. The session starts at 3 a.m. Till noon.
Sydney
Australia is where the trading day begins. The session starts at 5 p.m. and goes till 2 a.m., with most of the action happening on Sunday afternoon when traders try to regroup after taking a break over the weekend.
Tokyo
The Japanese foreign exchange market is the first of its kind in Asia and sees a large amount of trading activity. It operates from 7 p.m. to 4 a.m.
The best and worst times to trade forex
There are certain times considered the best to trade:
- Monday afternoon
- Numerous sessions overlap
- During high liquidity
The worst times to trade are:
- Major news times
- During national holidays
- Unusual actions of the price
Conclusion
As you see, in forex trading, timing is everything. Now that you know the times at which the Forex market is open and some of the best and worst times to trade during sessions, you can make a more informed decision about when to trade.
Remember – if you know the best time to trade, you can take advantage of opportunities in the market and minimize your risks.
