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Learning about the best times to trade on the Forex markets is crucial to succeed. All types of traders, including scalpers, day traders and swing traders, should be able to determine the optimal time to make trades, which is the time of greatest liquidity.

The timing of deal execution is influenced by lower transaction costs, more volatile prices, and more trading opportunities. This guide will look at the best time to trade Forex and explain its benefits for successful trading.

What Effect Does Your Trading Style Have On Your Entries?

Your strategy significantly affects your buying and selling on the Forex market. In the world of forex trading, it is generally agreed that shorter-term trading strategies require higher accuracy regarding the right time to enter the market compared to longer-term plans.

Scalpers and day traders should be careful, because trading during low-liquidity sessions can lead to higher transaction costs, as a result of which they will simply lose profits. To make a large number of transactions during the day, you need to be able to determine the best time for it. This is important because it can make or break your trading session.

Swing and position traders’ trading results aren’t too affected by the timing of their trades because their profit goals and trading periods are much longer than those of scalpers and day traders.

Currency Exchange Market Hours

To figure out the best time to trade on the Forex market, you must thoroughly understand how the market works. The foreign exchange market is an over-the-counter (OTC) place where traders buy and sell currencies during set trading times. On the stock market, shares are traded on stock exchanges. On the Forex market, however, there is no single central exchange.

Instead of changing hands in person, currencies are sold at major financial centers worldwide. These are called Forex trading sessions. The most important trading sessions on the Forex market are in New York, London, Sydney, and Tokyo. Since these cities are in different time zones, the market is busy 24 hours a day, five days a week.

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Most of the time, the best time to trade Asian currencies and cross-pairs, including the Australian dollar, the New Zealand dollar, or the Japanese yen, is during the Asian trading sessions in Sydney and Tokyo. Except for the USD, which is traded often during all market sessions, most money changes hands in Asian currencies during Asian market hours. When trading Asian currencies, the higher volatility and smaller gaps give intraday traders and scalpers a significant advantage.

Forex Trading Is Best at the London-New York Trading Session Intersection

The foreign exchange market has a massive turnover of about $5 trillion daily, with the London and New York sessions still making up the most. The USD is still the most traded asset on the foreign exchange market, making up about 88% of all trades. It is important to remember that all-important news about the USD is released at the beginning of the New York session. The London trading session is still the one with the most daily transactions. About 37% of all Forex transactions happen during the London trading session.

During the London-New York overlap, the two most important Forex trading sessions happen simultaneously. This gives traders the most significant price changes and the tightest gaps to trade. 

From Monday through Friday, the trading time between London and New York starts at noon GMT and ends at 4:00 PM GMT.

Use the Best Time to Trade

For intraday traders and short-term speculators, the best time to trade Forex is when the London and New York sessions meet. This is when the bid-ask gaps are the tightest and the exchange rates change the most. Also, important Forex news is shared at the beginning of the New York session, which could significantly affect the rest of the trading day.

The bid-ask spreads change throughout the day since there are no set spread brokers in the forex market. After the main trading sessions, it’s best not to start new accounts because market liquidity may still not be at its best, and spreads may be higher.

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Nathan Boardman

By Nathan Boardman

Nathan Boardman, acclaimed Forex trader and author, specializes in market analysis, strategy development, and risk management. His insightful articles, published in Forex Profiles, empower readers to navigate the currency market successfully.

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