Forex, the market that never sleeps
The forex market hours is a topic thoroughly searched on the web as investors accommodate their strategies or forex trading to each time. Some traders even have different chart layouts depending on the hours they are trading.
Did you know that Forex pairs have different behavior depending on what time is it in the day? Yes, they have. Now, we are talking about the so-called Forex hours and how Forex market hours affect the pairs.
Finally, you will have a better approach to what is the best time to trade Forex for you.
Forex Market Hours
Forex is the market that never sleeps, but it took resting times. As the foreign exchange industry works from the opening in New Zealand and Australia very early in the day until San Francisco and Honolulu very late in the afternoon, there are many forex hours to trade.
It works only from Monday to Friday, no weekend. However, you should take that information with a grain of salt as it could include parts of the weekend depending on your location.
As Forex is an online market where traders around the world are working, you can be in San Francisco on Sunday morning trading with the Australian opening bell. In the same way, a trader could buy euros against the dollar a Saturday Morning in Oakland, New Zealand.
That being said, Forex experts and most relevant websites take the UTC, or GMT, time zone. So, it is widespread to say in Forex that an economic release or technical event happened at 1:00 PM GMT, not EST or central European time.
Forex hours are usually separated in sessions regarding the place where most of the trading is located.
There are three major sessions. The Asian session, including Australia, Japan, China, Singapore and Hong Kong, the European trading hours, including Berlin, Paris, Barcelona or London, and the American session, with obviously have Wall Street in New York, Canada, and Brazil.
It is also important to highlight that every session has its differentials as well as its behaviors. Let’s see.
Differences between Forex hours
Every trading session and forex hours has its synergies, considerations, specifications, and better pairs to trade. If you operate in the Asian session, you may want to trade GBP/JPY for example, or you will know that the USD/JPY has more volume there than in the European trading hours
Also, there is a period of time when the European and American sessions work together. It is called the prime time of Forex as the highest level of volume happens at that time. In terms of GMT, it begins around 10 UTC and finishes by 14 UTC.
Best time to trade Forex
Asian session: The Forex hours in the Asian session provides small ranges but easily identified patterns. As the market is trading with low volume, it could have violent movements when a piece of big news hit the market, but overall, it is quiet. Scalping traders love the Asian session.
GBP/JPY, USD/JPY, and AUD/USD are the best pairs to be traded. Also, the AUD/NZD has its prime time during the Asian session. Obviously, it is not too much volume in New Zealand and Australian dollars, but if you want to trade it, it is your time.
European Session: It is when the Forex market comes alive. Euro and the Japanese Yen are essential but always crossed against the Dollar. Experts start digesting news from Asia and the trading day really begins in Europe.
Try USD/CHF, EUR/GBP and crosses as GBP/JPY, EUR/JPY, and Nordic crosses. However, remember that the EUR/USD is the king.
American Session: The beginning of the American session is the prime time of Forex as it also includes the midday in Europe and the release of the most important economic events in the market. So, it is the best time to trade strategies based on news.
The Dollar is dominant with EUR/USD, GBP/USD, and USD/JPY as the pairs to follow. Also, keep attention on the USD/CAD, AUD/USD, and the NZD/USD in the late American hours. The Mexican Peso, as well as the USD/COP and USD/CLP, have some relevance in their local markets.
Long story short, if you want to have an active trading session, go for the America/Europe hours. However, there are also opportunities in Asian hours. That being said, the best time to trade Forex is that who fits with your strategy and skills.