The best times to trade Forex depend on your trading style and preferences. Swing and day traders benefit the most from high liquidity and price volatility. Your trading style influences the time of day to trade Forex. However, it is best to trade during the hours when markets are most liquid. Before we discuss the best time to trade Forex, let’s know a little more about the Forex market
What is Forex?
Forex is a highly liquid global market that remains open 24 hours a day. Anyone can participate in the Forex market. It’s an over-the-counter market, and it is the largest market in the world. Its liquidity attracts countless traders and investors. Forex Market is a critical part of the global economy, allowing states and individuals to invest and conduct businesses worldwide.
In Forex trading, three major Forex trading pairs are USD/JPY, EUR/USD, and GBP/USD. These are the most traded and represent most of the market’s volume. These pairs have the tightest spreads. The volume of transactions in the major pairs attracts the most traders, which means that spreads are narrower than in other currency pairs.
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What are the Major Forex Trading Sessions?
Asian Trading Session is the first trading session of the day, which begins at 5:00 p.m. EST in Sydney. It’s also known as the Sydney session. Some trading activity also starts in New Zealand earlier than that. Following the Australian session, the Japanese Session starts, making the Asian Session even bigger. Toward the end of the Asian session, the London session starts. Soon after, the U.S Session starts, which is one of the most significant trading sessions.
What is the Best Time to Trade Forex?
If you’re a Forex trader, you’re probably wondering when is the best time to trade. The good news is that various options are available to you. Forex market is open round the clock and closes only on the weekends. However, it is essential to understand the complexities and risks associated with these trading hours.
While there is no “best time” to trade Forex, there are specific sessions that are better than others. For example, it’s best to trade during the London session if you’re looking to trade volatility. During the London Session, the number of transactions and volatility are at their highest. Another good time to trade is when the London and New York sessions overlap.
Forex trading hours are open throughout the day, but peak times for currency pairs occur between overlapping time frames. The overlapped sessions provide more opportunities than usual for seasoned traders. Of course, you should avoid trading on low-volume days, national holidays, and news releases.
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