This can work if price is not breaking major price levels and continues trading within relatively narrow ranges. There are a few further important forex market hours to be aware of. March 9, at 3: This can suit certain traders, if you are freelance, work during the days or nights or it is a full-time profession. Charles March 5, at 6:
GMT and EST hours for trading Forex. Forex market welcomes traders 24 hours a day. Forex market opens on Sunday 5 pm EST ( pm GMT), closes on Friday 5 pm EST.
Forex trading hours can be said to be a time period that is made up of a day of business in the financial market, which covers periods from the opening bell to the closing bell. It is required that all orders for the day should be placed within the time frame of the trading session, with bulls and bears participating in shaping the live market prices.
During weekdays we have the forex market open 24 hours a day, but we should be aware that this alters during the weekend. It is also important for us to state here that the market presents sessions in which price is generally volatile and periods in which price turns out flat. We will explore some of the major trading sessions in this article, and look at the kind of market activities that can be expected over these periods, and also how traders can incorporate these knowledge into a concise trading plan.
Liquidity is of paramount concern to traders when looking at the various times of the day, and we can simply it to mean the ability to enter a trade without measurable price shifts. Some high liquid pairs like the EURUSD can take up massive orders without reacting, but the exotic pairs are more likely to slip noticeably when massive orders are being entered, which is evident because they are made up of fewer orders in the market and as such larger orders will eat up all other orders before getting filled eventually.
The high liquidity sessions of the market are those periods in which the largest number of traders are live in the market. The Asian markets are basically the first to open after the weekend.
Time Zones of different countries are different. The time that is your work time may be the sleep time for the traders from other countries.
Different countries in different time zones have different opening and closing time of the market. Thus, when all the opening and closing time are joined the result is a 24 hour trading market.
There are four more important time sessions in the Forex market. It happens many times that when one session is open, another session also begins and this cause interaction of hours. The interaction of market hours of different time sessions is called Overlapping Market Hours.
Volume of orders increases during Overlapping Market Hours and so the volatility also increases. The increase of volatility attracts many traders and investors because they see these hours as their profit earning opportunity.
Of course that same trader would do quite poorly if price broke significantly above resistance or below support. How do we avoid the worst market conditions for this particular style of trading? The results are not good. When the period RSI crosses above 30, buy. When RSI crosses below 70, sell.
Yet once we factor in the time of day, things become interesting. This next chart shows the exact same strategy over the exact same time window, but the system does not open any trades during the most volatile time of day, 6 AM to 2 PM Eastern Time 11 AM to 7 PM London time. The difference is dramatic. Only allow the strategy to open trades after By sticking to range trading only during the hours of 2pm to 6am, the typical trader would have hypothetically been far more successful over the past 10 years than the trader who ignored the time of day.
Of course, not all currencies act the same. For example, the Japanese Yen tends to see more volatility during Asian hours than the Euro or British Pound; these are the hours of the Japanese business day.
The poor results speak for themselves. We might range trade these currency pairs during the 2 PM to 6AM time window. Unfortunately, our optimal time window does not work well for Asian currencies. This is due to the fact that these currencies are more often subject to large moves during Asia Session than the European currencies.
Many traders have been very unsuccessful trading these currencies during the volatile 6 AM to 2 PM time period. Asia-Pacific currencies can be difficult to range trade at any time of day, due to the fact that they tend to have less distinct periods of high and low volatility. This article is a part of our Traits of Successful Traders series.
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The Best Forex Trading Hours These four overlaps normally make the three best times to trade. Of these, the most favorable trading time is the 8 AM to noon overlap when both New York and London exchanges are open. Generally, the best time to trade forex is when the most markets overlap and the currency pairs you are trading are heavily tied to both. So the GBP/USD pair is best traded between and GMT for example. Depending on the time of the year (daylight saving time shift) GMT is 4 or 5 hours ahead of the U.S. Eastern time as there is no daylight shift used in GMT. Fig Active trading sessions around the world in Greenwich Mean Time.