Forex
Trading Hours
Discover why it’s essential to understand Forex trading hours and how you’ll need to adjust and tweak your trading strategies based on those trading hours. Trade at the wrong times and you’re throwing your money away
So Many Hours in the Day for Forex Trading
Time plays a greater role in the forex market than some like to give it credit for. Indeed, there are no set hours for forex trading, but that doesn’t mean that the hour doesn’t affect what currencies are moving and which aren’t. The opposite is in fact true, and the goal becomes to learn when to jump in a make those power trades.
Experts agree that the best time to get good business on a trade is when there is a vast volume in the currency market segments. Because of the 24-hour nature of the forex market, it is best to line up the times when multiple segments of the market are dealing at the same time.
Every forex marketplace across the globe opens at 8 a.m. and closes at 4 p.m. in their individual time zones. A person reaps the most benefit from multiple trades developing, and often that requires knowing when and which markets in different nations overlap.
There is always the most volume movement during the overlapping times when multiple segments of the market are open at once.
An example: the EUR/USD, USD/CHF, and GBP/USD all trade well between 8 a.m. EST and noon EST, because the American markets are just opening, while the European markets are winding down for the day.
Alternatively, 1 a.m. EST to 3 a.m. EST is also a good window. In this instance, the Asian markets are closing at the same time as the European markets are opening. Another great opportunity in the forex market is between the hours of 7 p.m. and 10 p.m. EST, which is when the Australian and Asian markets overlap.
One of the few “dead zones” on the clock is between 4 p.m. and 6 p.m. EST as the US market closes, and no one really overlaps, so it isn’t very likely that a monumental trade is going to develop.
It is pretty common for currency to trade in pairs since they tend to trend in the exact same or inverse directions. This detail is very helpful to traders who can plan to buy or sell more than one pair knowing that there is a very good chance of them moving in either parallel or inverse directions.
The following short list is of pairs that commonly tend to pattern in parallel relationships. It important to remember that these are just guidelines and may not reflect actual trading on a given day.
EUR/USD and GBP/USD
USD/CHF and USD/JPY
AUD/USD and NZQ/USD
Conversely, this list is of pairs that tend to move in opposite directions. Of these, the Swiss Franc and the Euro move the most inversely.
EUR/USD and USD/CHF
GBP/USD and USD/JPY
AUD/USD and USD/CAD
The old adage goes that bulls and bears make money, but pigs get eaten. This means that you should never get too greedy. Risking more than 2% of a buying and selling account can lead to disaster. You should be in for 10%-30% pip gains and move one to the next trades. Sometimes it is better (definitely safer) to build consistent small gains that add up to big profits.
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