Best Currency Pairs to Trade at Night

You have lots of choice when it comes to what currency pairs you should trade at night. The selection is probably going to be according to what your trading style is and how much time you have to dedicate to forex trading. If you are scalper, you might want to trade a currency pair with lower volatility at night. If you are a trend trader, it might be better for you to choose more active currency pairs.

What is forex night trading?

If it wasn’t obvious by the name, this is when you trade the forex market during the evening. This can be for a number of reasons but is usually when a trader does not have any other time during the day when they can trade due to work or other commitments. It may be that they choose to trade in the evening because they have a strategy that works best during those forex trading times.

What is the best time to trade at night?

There is no universal best time to trade forex at night, simply because we are all in different time zones. If a trader in London says that 5-minute forex scalping strategies work best in the evening, this would be morning in the Asian trading session. If a trader in Australia suggests that a 1-minute forex scalping strategy works best in the late afternoon, this would be in the early hours of the morning for a New York trader and probably not feasible.

Best currency pairs for scalping at night

As I have mentioned above, night time as going to depend on where you are. Generally speaking, forex scalping strategies tend to work best on less volatile currency pairs from my experience. Therefore, I would be looking at what currency pairs are the least active during the evening in your time zone.

The forex market is usually referred to as having 3 market sessions: Asian, London, and New York. The first thing to do is identify what session your evening trading falls under and then choose the currency pairs that are not active during that time.

Let’s say that you are based in London and when you trade forex in the evening, the EUR/GBP and EUR/CHF currency pairs are not very active. This may be a good hunting ground for scalping strategies where you try and pick a few pips from the market.

If you were in New York and wanted to scalp the forex market during the evening, you would probably want to avoid currency pairs that include the AUD or JPY, such as the AUD/JPY, AUD/USD and USD/JPY.

Best currency pairs at night for trend trading

If you are using a trend trading forex strategy, you might want to look for currency pairs that are active in the evening your time. You can apply the same principles that we mentioned above regarding market sessions to identify the most active currency pairs.

For instance, if you are in Australia and want to try and enter a position in line with the trend at night, you might want to look at a currency pair that includes the EUR, GBP or USD. This is because the NY and London sessions will be open in the evening your time and they usually have lots of liquidity which can lead to some good market movement.

On the other hand, if you are a London based forex trader and want to catch trends in the evening, you would probably avoid the EUR, GBP and USD currency pairs as those trading sessions would be coming to an end. You might instead look for the AUD and JPY currency pairs.

How to choose the best currency pairs for trading at night?

Aside from the reasons that we mentioned above, there are a few other important considerations that you need to make. As there can be less liquidity during night time trading sessions, you will often find that forex spreads tend to be higher than usually. This can make it difficult for scalping systems that rely on small pip movements.

For example, a UK based trader could scalp the EUR/USD currency pair with spreads from 0.0 pips in the day which could easily increase to 2 pips at night. If you are only targeting a couple of pips per trade, this makes things difficult. Not to mention, you need to think about additional slippage due to a lack of liquidity and any commission fees.

If you do want to scalp currency pairs at night, you might want to look for an ECN forex broker such as IC Markets. I find them to have some of the lowest spreads and commission fees that I have seen from any forex broker. They also have a great selection of funding options and excellent 24/7 customer support.

Your choice could also depend on how much time you have to dedicate to trading forex in the evening. If you only have a few minutes, then you might be looking to use a more long-term trading strategy. In that case, it might not matter so much which currency pairs you choose.

Even if you have hours on end to trade forex at night, I would still prefer to focus on one currency pair at a time. I find it very tricky to simultaneously follow multiple currencies at one. When you focus on one FX cross, you can learn more about how it moves and what to expect.

Advantages of trading forex at night

  • Plenty of buy and sell signals
  • Can trade any pair with different strategies
  • Can use any chart timeframe
  • Do not need to spend hours analysing charts

Disadvantages of trading forex at night

  • Might make mistakes if you are too tired
  • Not all currency pairs are that active
  • Forex spreads can be higher than average
  • Can be more slippage during trade execution

Conclusion: what are the best currency pairs to trade in the evening?

The best currency pairs to trade at night will depend on your time zone, trading strategy and the time you have to trade. As this differs so much between each trader, it is impossible to say which currency pairs are best for everyone. As a general rule of thumb, I would say that less volatile currency pairs are better for scalping in the evening whereas more volatile currency pairs are better for trend trading.

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