Everyone has a different time of day that they can allocate to trading the forex market. This is because some traders might have a full-time job and can only trade in the early morning or evenings. Other traders might have a part-time job that they need to try and work around. Then you have those who are in the comfortable position of being able to trade full-time. Regardless of your circumstances, there are some good times to trade forex and some bad times to trade forex.
Forex trading times
The forex market is open 24 hours a day during the weekdays which allows traders to potentially trade all day and all night, depending on what works best for them. Although the forex market technically never closes, retail traders can only trade the hours between Sunday at 5:00 pm ET and Friday at 5:00 pm ET.
Knowing the forex market’s operating hours is essential for a forex trader regardless of the time that you decide to trade. You need to know when the forex market opens and closes so that you can plan your trades accordingly.
There are generally four main trading sessions: the Sydney session, Tokyo session, London Session, and the New York session. Both the Sydney and Tokyo sessions are customarily referred to as Asian sessions. This is why Forex is usually referred to as the 3-session market: Asian, London, and New York. Your time zone might determine what forex trading sessions works best for you. Someone in London might not be able to stay up all night trading the Asian sessions.
London is the largest and most important forex trading session in the world, with roughly a 34% market share of the daily forex volume. Most of the world’s largest banks keep their dealing desks in London because of the market share.
Best time to trade forex
The best time for you to trade forex is going to depend on the hours that you have available to dedicate to trading and which currency pairs you’re looking to trade. The good thing is, you can be flexible with how and what you decide to trade in order to meet your own situation.
The majority of trading activity for a specific currency pair will usually happen when the trading sessions of the individual currencies within the pair overlap. For instance, the GBP/USD will experience a higher trading volume when both the London and New York sessions are open.
Thus, if you wanted to use a trend trading strategy on the GBP/USD pair, you would probably want to trade during the afternoon London time as this is when the New York and London sessions are both open. If on the other hand you wanted to trend trade on the AUD/JPY, you will experience a higher trading volume when both the Sydney and Tokyo sessions are open.
If you can only trade a few hours in the morning when only the Asian session is open, you might want to look for a currency pair with either the AUD or JPY included. If you want to trade another currency pair that is not as active during your allocated trading hours, a range trading strategy might work better.
Another thing to consider when choosing the best time to trade forex for you, is when you can be most focused. It doesn’t matter if you can trade every single currency pair with the perfect trading conditions, if you cannot focus on what you are doing then your performance can suffer. If you start work at 8am but try to squeeze in a few hours of trading before hand, you might rush and make rash decisions. It would be better to instead switch your trading time to the evening after work, assuming you still have the energy.
If you simply cannot find enough time in the day to trade forex, you could always look to use a swing trading strategy where you hold position for days, weeks or months. These strategies can be done on the daily charts which means you would only need to take a few minutes out of your day to see if there are any trading signals and then you can continue to go about your business.
Worst time to trade forex
The worst time to trade forex is going to be when you feel pressured. This could lead to unnecessary mistakes and losses. I have seen the exact same forex strategy give traders completely different results because of how they were implementing them.
If you have had a long day at work and are lacking energy, it might not be a good idea to start sifting through charts for trading opportunities. Instead, you could do some light reading to improve your forex knowledge which can then be applied when you are feeling more up to it.
If you are a morning person, then you might be able to sneak in a few hours of concentrated forex trading prior to starting work. Just make sure you are fully focused and consider the implications of having a trade open when you go to work. That might not be an issue if you are using a fixed stop loss and take profit level. However, if you are using indicators for an exit, then you might miss the chance to close the position when at work.
Another bad time to trade forex is when you have been suffering too many losses. This can lead to anger where you try to make up for these losses by taking trades that just aren’t there. The same can be said when you have had a good run of winning trades. Sometimes it is better not to get greedy and quit whilst you are ahead.
In terms of forex market sessions, many traders would argue that trading during hours of low market volatility is a bad idea. This is because there is less liquidity and the moves tend to be much smaller. Not only that, but spreads and slippage can increase which makes it harder for forex scalping strategies to be successful.
Conclusion: what time should I trade forex?
The best time to trade forex depends on your individual circumstances, including what pairs you want to trade, your strategy and the hours you have available. You might have no choice but to trade a few hours in the evening. If that is the case, you might look for a currency pair and strategy that fits into that routine.
Just because you can trade the forex market any time of the day or night doesn’t necessarily mean that this is a good idea. Some may argue that it the best time to trade is when the market is active with lots of forex traders opening and closing positions, which creates more liquidity and can give you better bid/ask prices. Others might argue that this causes too much volatility and they might prefer to trade when the forex market is quiet.
I think that it is better to be selective with the times you trade forex and don’t try to do everything at once. You will want to have a good forex trading plan and dedicate set hours each day to trade the currency pairs you are interested in at a time you can focus the most. Otherwise, you might get frustrated which can lead to negative emotions, poor discipline and unnecessary mistakes.
If you just don’t have the time to learn how to trade manually, then you might want to consider a forex robot instead. These can trade automatically on your behalf without you needing to do anything. Another option would be forex copy trading where you can duplicate another trader’s activity onto your account. eToro are one of the industry leaders when it comes to copy trading.
Self-confessed Forex Geek spending my days researching and testing everything forex related. I have many years of experience in the forex industry having reviewed thousands of forex robots, brokers, strategies, courses and more. I share my knowledge with you for free to help you learn more about the crazy world of forex trading! Read more about me.