There are a lot of nuances a trader needs to know to be successful in the Forex market. The best times to trade is one of the important ones. Not only do you need a good method. You should also know the best times to implement it.
This will depend on the currency pairs you trade as well. For example when trading the USD/ GBP pair. The best time to trade it would be during the time that the financial center is open in the US and/or the financial center in the UK is open. Preferably both. This is extremely important to anyone who wishes to become a day trader. The times that these two financial centers are open is between the hours of 8am Est time (New York time) and 12pm Est. and is when there is the most volatility and liquidity in the market. This is not surprising considering the US and UK account for more than 50% of all trades that take place on a given day. Coupled with the fact that most of the economic news is released for these economies as well during these times.
The Girl with the Dragon Tattoo
So lets review all sessions and which are the least active. Starting with the slowest, the Asian session. The Australian market combined all of Asian markets still pale in comparison to the size of just one of the two mentioned above. Big moves do occur during this session but they are not often and usually due to a big news release.
Next to open is the European session which starts with Frankfurt at 2am Est. time and then London at 3am Est. time. Note that the Asian session is in the 2nd half of their day at this time also. There is usually good volatility and liquidity at this time also since Asia is winding down their day while Europe is starting theirs. This session ends at 12pm Est. time as mentioned above.
Last is the US session that opens at 8am Est. and closes at 4:30 pm when US equities close. Volatility and liquidity usually drop off after the European session closes and the market gets slow for the last part of the trading day in the US. Obviously the time the market is thinnest will be the few hours between US close and Asian open.
One way of using this knowledge to your advantage is to study price action during these times which will give you an edge. There are certain times that price will show you where the market is headed and this will add confidence to your trade and your profits. Good luck.
Nial Fuller has been a successful Forex trader for many years. He started studying price action when he was 15. Now at 25 he has traded at a major firm for over 6 years. His website offers a lot of free material. To get free video tutorials on price action visit this link: learn to trade
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