Best Currency Pairs to Trade in The Morning

If you are a morning trader, then you will want to know what the best currency pairs to trade in the morning are. The reality is that it will really depend on a few important factors. Firstly, your location and secondly, what your trading strategy is. In this article I will take a look at some of the things you should be aware of when choosing your currency pairs for trading in the morning.

What is morning trading?

If it wasn’t obvious, morning trading is when you buy and sell currency pairs from after midnight all the way up until midday. However, not all of us are in the same time zone which means that the morning trading hours will differ. What is morning for one trader could be the evening for another. Therefore, you need to consider what market sessions your morning trading routine falls under and then pick your currency pairs accordingly.

Morning trading doesn’t need to involve spending hours watching charts. This can actually be detrimental if you are tired and trading in the early hour of the morning or rushing your trades because you need to go to work. If you do take a position and need to be around to exit, you could end up skipping work or not getting any sleep.

To avoid this, you could always use a forex swing trading strategy where you only check the charts for a few minutes each day to look for a valid trading signal. These are commonly done on the higher chart timeframes such as the daily chart. I find they do a great job of filtering out market noise, so you can save yourself some time and difficulties from trading forex in the morning.

What are the forex market sessions?

The Forex market is open 24 hours a day, five days a week and is made up of a vast array of participants, including central banks, hedge funds, investment management firms, retail forex brokers and investors from all over the world.

There are three major forex trading sessions which comprise the 24-hour forex market: the London session, the US session and the Asian session. Noting the specific times of each trading session will help you to determine the trading strategies you would like to use for each currency pair that you trade in the morning.

Keep in mind that there are periods of the day where two sessions are open at the same time. These market session overlaps represent the busiest times of day in terms of forex transactions, simply due to the fact that there are more market participants active. Traders can therefore expect both higher volatility and liquidity during these forex market hours.

How to choose the best currency pairs to trading in the morning?

If you are trying to analyse the best time in the morning to trade currency pairs, it is paramount to understand the different trading sessions and which currencies or markets are most liquid or not during those hours.

For instance, if you are located in London and trend trading in the morning, you might want to look for GBP and EUR pairs such as the EUR/GBP, EUR/USD and GBP/USD. This is because there will be more liquidity on these currencies which can give some good market movements.

On the other hand, if you are based in New York and want to scalp the forex market in the early hours of the morning, you might consider the EUR and GBP currency pairs as the London session would be closed so there may be less volatility on these currencies.

What is the best forex strategy for trading in the morning?

You can use both scalping and trend trading strategies in the morning. I would choose the currency pairs that have low trading activity for scalping and those which are more active for trend trading.

If you are going to be using a trend trading strategy, the moving average breakout strategy might be worth a look. If you are planning on trading range bound markets with less volatile currency pairs, then you might want to think about a forex reversal strategy instead. I think it can be a good idea to keep both options available and see which presents the better opportunities at that time.

It is worth mentioning that some currency pairs may have higher spreads and more slippage than usual if there is less liquidity available. This can make it hard to reach profit targets with scalping systems that rely on making a few pips for each trade.

For the best possible trading conditions at all times, you might want to consider an ECN forex broker such as IC Markets. I find them to have plenty of liquidity which ensures tight spreads and quick execution speeds. They also have a good range of deposit/withdrawal options and excellent 24/7 support.

Advantages of trading forex in the morning

  • Lots of opportunities
  • Can trade any pair using different strategies
  • Can use any chart timeframe
  • Doesn’t need to be time consuming

Disadvantages of trading forex in the morning

  • Might make bad decisions if tired or in a rush
  • Some currency pairs do not move that much
  • Forex spreads can be higher than usually
  • Possibly more slippage and late entries

Conclusion: what are the best currency pairs to trading in the morning?

As mentioned above, the best forex currency pairs for you to trade in the morning is going to depend on your location and preferred trading style. Once you understand the different market sessions, you can choose the best currency pairs depending on the trading strategy that you are using. You can even trade all currency pairs and simply use a different strategy for each depending on how active it is in the morning your time. I don’t think there really is any best or worst time to trade forex, but as traders we should be able to adapt to what the current market situation is at all times.

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