Ever wondered what is the best forex trading times? Well, the forex market is a 24hr market so you can trade all of the 24hrs and make a lot of money anytime during that 24hr period, right?
Not, really. In this article I will explain why you need only 2 forex trading times.
You see, market timing is critical because there are certain times during the day where trading the forex market brings you much greater chance of success.
To Be successful in Swing Trading also means Trading during the right time of the day because trading during the wrong time of the day can mean the difference between success and failure.
I found out the hard way…
You see…when I was starting out to trade forex, I did not know what was the best time to trade the forex pairs and most times, it proved to be a costly mistake and here’s what used to happen:
- I will take a trade when I see a trade setup happening
- the market goes nowhere…its like watching a snail move across a distance of 1m! It takes forever to reach its destination!
- I sit and wait…and wait…and wait…to see if price will move in the direction where my chart analysis tells me it could potentially go.
- even it is moving there…it does not move by much at all.
- it looks as though the forex market is sleeping.
Do you know what I’m talking about?
Well, if you’ve never traded before, you will not know what I’m talking about as it will make no sense to you. The only time you will realize the importance of forex trading times is when you actually get into a real live trade and see for yourself how the market moves…and then you will know.
3 MAJOR FOREX TRADING SESSION
If you don’t know, there are 3 major sessions in forex trading:
- The London session
- The US Session
- And The Asian Session
THE LONDON TRADING SESSION
The London trading session starts around 8:00 GMT and ends around 16:00 GMT.
So what do you think would be the most active currency pairs during the London session?
Answer: EUR, GBP and USD
THE US SESSION
The American forex market starts at around 13:00 GMT and ends at around 22:00 GMT
Currency pairs with AUD, EUR, GBP, JPY and USD are most active during the US trading session.
THE ASIAN SESSION
When America and Europe sleeps, the forex market is being trading during the Asian Session. The currency that seems to move the most during the Asian session is JPY.
Asian Market start approximately around 23:00 GMT and End at 08:00GMT.
WHAT ARE THE BEST FOREX TRADING TIMES THEN?
Answer: the London session and US session.
Why?
Because:
- the forex market is full of active participants during the London and US trading Session
- the number of active participants is even greater during the London and US trading session overlap.
- lot more active participants means there is a lot more trading volume entering the market
- more trading participants with a lot more trading volume means a lot more volatility.
- a lot more volatility means that price moves a lot during that trading session which allows you to make money.
See the figure below:
Note that the forex trading sessions overlap a bit…
SUMMARY
I live in Asia and therefore I do trade the Asian session not frequently, but what I can tell you is that during the Asian session, there is less trading volume and less volatility. Your trade will go nowhere most of the time.
But trading during the London and US session is entirely different story: the market moves! Honestly, it moves! If the market wants to move up, it will go up! Or if it wants to go down, it will go down!
The best way to describe it? : like a fast flowing river.
Here’s the good thing:
- in such a fast flowing market, you make money fast when you pick the right trend direction based on your forex trading system
But here’s the bad thing:
- you can lose money fast too.
But it all comes down to managing your trading risk. You do that well and you will be right.
Luckily for me, I also live in a timezone where I can trade the start of London session for at least 5-6hrs each day which is for me, perfect!
So let me recap:
- you will make money easily when there is a lot of trading activity,which means a lot more trading volume, which means increased volatility-this is the market where money is made.
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