Best times to trade forex pairs

Yet each hour of the day has different tendencies based on what part of the globe is open for business.

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Major markets are open at different times throughout the day. Which market s is open directly affects the liquidity and volatility and forex pairs. Currencies generally see increased liquidity when one or more markets that actively trade, or use, that currency are open for business.

These charts do not show every market in the world, although these are the major ones. Germany opens one hour before London; therefore, some consider that to be the open, and not the start of the London session. Those major sessions directly impact currency pair volatility. The charts below show hourly volatility.

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If you are using more of a range trading strategy, or prefer low volatility, trade during the sedate times, where the charts show decreased hourly volatility. All figures below are current as of January 9, Interestingly, the final Asian Session trading hour when the London Session opens while the Asian session is closing down, makes up one of the busiest forex trading times. Chicago trading is one hour later and California trading is three hours later.

At this point, forex trading ends for the week.

What Is Forex Currency Trading?

You may have noticed when reading the previous section that at several times of the day more than one market is open at the same time. These overlapping times usually provide the greatest degree of liquidity in certain currency pairs, as well as wider pip range movements.

This tends to make these more liquid periods better times to trade, theoretically at least. Basically, since more liquidity and a higher volume of trades will often be more beneficial to the speculative forex trader, certain times when trading is heavier in particular currency pairs can give a trader the edge needed to be profitable.

This is especially true for traders using short term strategies like scalping or day trading. This overlap is the key forex trading period when both the New York and London major forex trading centers are open for business. Trading in all the European currencies is heaviest during this period and offers the most liquidity for currency pairs involving the Euro, Pound Sterling and Swiss Franc. Such especially liquid overlapping times would include the important AM to AM period when the major trading centers of New York and London are both open for business. Frankfurt is also open from 8AM until AM.

This time period usually offers the most liquidity for the Japanese Yen, as well as the European Yen crosses.

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Another good time to trade in order to take advantage of several different markets being open simultaneously, is between PM and AM as Asian and European markets overlap at different points. The Tokyo, Singapore and Hong Kong forex markets continue trading throughout this overlap period. This time period tends to have the most liquidity for the Australian and New Zealand Dollars and their crosses. You can also trade into the thinner markets in New Zealand that opens at pm and Australia which opens at PM.