theEvery day in the currency markets, thousands of trading opportunities come and go, providing traders with a bunch of investment opportunities. Thanks to its accessibility and easiness to learn the ins and outs, the number of Forex traders increases every day as well as the brokerages such as Trader House, a very decent brokerage from the UK. We suggest reading the Lexatrade review and seeing what they offer.
Besides the question of what broker to choose for placing the orders and what currencies to trade, the question that arises is also: at what time of the day should you trade? Here is the answer.
Periods of high activity in Forex
Open 24 hours a day, the foreign exchange market offers traders the possibility of trading at any time of the day. Trading results are not, however, equal throughout the day. Analysts often advise novice traders to base themselves on when Forex activity is the strongest. These times correspond to the times when the main Forex exchanges open.
We thus distinguish in the first place the Asian session, which begins with the opening of the Tokyo Stock Exchange. The Asian session runs from 11 p.m. to 11 a.m. Paris time. This period is characterized by strong activity. And significant volatility on Asian currencies, especially the yen, and on the GBP/CHF and USD/CHF pairs.
The European session, which begins at 8 a.m. and ends at 6 p.m., corresponds to the period of the day when the activity in the market begins to be very strong. Strong volatilities on the major currency pairs are thus observed in this time interval. The US session, running from 1 p.m. to 11 p.m., records the strongest Forex activity, especially between 1 p.m. and 6 p.m. when the European and American exchanges open at the same time.
Major economic news. And statistics are also published during this period. The GBP/CHF, EUR/USD, GBP/USD, and USD/CHF pairs are the most volatile over this period, with traders worldwide taking advantage of the volatility to try and rack up the maximum gain.
Which timing strategy to adopt?
Relying on the volatility of currencies alone to choose your trading moment is not, however, recommended. Especially for amateur traders and those who are adept at range trading. Often the best way to trade is to position yourself at a time of day when activity and volatility seem low. And close your positions as soon as the pair being traded begins to become too volatile to be predicted.
Relying on the volatility of currencies alone to choose your trading moment is not, however, recommended. Especially for amateur traders and those who are adept at range trading. Often the best way to trade is to position yourself at a time of day when activity and volatility seem low. And close your positions as soon as the pair being traded begins to become too volatile to be predicted.
Conversely, periods of high volatility. Recommended for the Swing traders. The main difficulty, in this case, consists in detecting during the session the signs of a secondary trend. Even tertiary – interesting to trade, to position oneself at the start and then to detect the signs of a reversal to close out one’s positions before the reversal.
Conversely, periods of high volatility. Recommended for the Swing traders. The main difficulty, in this case, consists in detecting during the session the signs of a secondary trend. Even tertiary – interesting to trade, to position oneself at the start and then to detect the signs of a reversal to close out one’s positions before the reversal.
We hope we have helped you grasp the importance of timing in Forex trading. Keep these tips in mind the next time you sit in front of your computer screen and start trading. Good luck!
