Trade 24 hours a day, 5 days a week
Because the FX market is open 24 hours a day, 5 days a week, currency traders are able to take advantage of many trading opportunities from different Forex centres or regions. However, even though this market is open around the clock, doesn’t mean that it’s always active.
With the Forex market, it’s possible to make money with a bullish as well as a bearish price movement, but it’s impossible to do so when the Forex market isn’t moving at all. Every trader should know when the best time is to trade on the Forex market before investing real money.
Trading sessions overlaps during various Forex market hours
One of the best periods to trade currencies is when 2 trading sessions are open at the same time, such as when the Tokyo and the London session overlap.
When 2 sessions are open at the same time, this means there are more traders in the market, which in turn increases market liquidity and volatility.
Which currency provides the most opportunities in each trading session?
During the Tokyo session, it’s best to invest in Asia Pacific currency pairs involving the AUD, the NZD, and the JPY. Obviously, news coming from Australia, New-Zealand, Japan, and China will have a greater impact during this trading session.
China is a large economic superpower, and both Australia and Japan heavily rely on Chinese demand for their exports, which means data coming from China can create volatile movements on Asia Pacific currencies.
It’s during the London session when there is the biggest trading volume, as it’s the economic centre of Europe (at least for now), and an important worldwide trading desk. During that session, it’s best to trade the majors – EUR, CHF, GBP, and USD.
The same goes with the New-York session: stick with the majors, and the minors.
Finding the most profitable trading opportunities during different market sessions
To optimise trading performance, FX traders should look for active trading periods as they offer the most profitable trading opportunities.
Volatility is what traders are looking for because if there is no price change, they can’t make any profit. Consequently, they should look for periods with the most trading volume.
Sundays/Fridays evenings and holidays aren’t the best days to trade currency pairs, as there isn’t much trading volume and market liquidity.