Best Forex Trading Time: When Better to Light a Cigar

One of the biggest advantages of Forex market is that it’s round-the-clock open. Yes, 24 hours a day, six days a week. While stocks and commodities markets “work” as normal-business-hours employees (Monday to Friday), Forex offers more. For instance, you can profit from your insomnia and place your trade at 3:00 AM EST on… Tuesday. Alternatively, you can use your preferred online FX trading system to simply place a trade at 10:00 PM EST on Wednesday. Just because you had time to deal with the market.

However, I would consider Forex to be something opposite to, let’s say, city traffic. When you are out for driving at 5:00 AM, for instance, you will definitely drive alone. Silent streets, no jams, no arrogant beeping… But with Forex this empty-street “driving” would not bring you the taste and the money you expect. The Forex mechanism works when the market is filled with buying/selling activity, which creates high liquidity and volatility. Much more chances to make the profits you want. So, you NEED other “vehicles” in Forex to feel the real driving and actually to become a skillful (and profitable) driver.

Below I decided to share some useful tips with you on the best Forex trading hours… non-trading time. It is all my back-tested.

Actual Trading Hours

Although Forex market never sleeps, like “kids in da club,” each financial center (i.e. New York, London, Tokyo and Australia) has its own operational hours. They are usually from 8:00 AM to 4:00 PM local time and are called sessions.

For instance, my favorite London session starts at 7:00 AM GMT and lasts to 4:00 PM. Why do I love it? Because of its unrivaled liquidity. The London session crosses two other big sessions when a huge number of transactions take place.  So trading these hours would give me the best market volatility along with the best chance to increase the capital.

Nice Overlapping Hours

As I said, overlapping is what a trader should crave for and use in full. As so many financial centers exist around the world, overlapping has its certain time. For example, the London and New York markets overlap from 8:00 AM to 12:00 PM EST, while the Tokyo and London “hug” each other from 3:00 AM to 4:00 AM EST. For Sydney and Tokyo the overlapping starts at 7:00 PM and lasts until 2:00 AM EST. No need to say, that this time offers traders the best opportunities as liquidity then really rockets.

Other Good Times to Trade

Except the overlapping periods, you could achieve a good trading result in following time:

  • Most of the movement comes in the middle of the week.
  • While three largest markets trade – New York, London and Tokyo.

Bad Time to Trade Forex

There are also the moments when it’s better to go swimming at the pool or light a plane-long cigar:

  • Sundays (everyone smokes cigars and swims then)
  • Fridays (everyone is close to cigars and swimming or not sure)
  • Holidays (everyone is lazy)
  • During economic reports releases (unpredictable volatility)
  • 4:00 PM – 6:00 PM EST (market volume is low).

So choose the right time and increase your chances to make the profits to buy a cigar of that size.