When is the optimal time to be trading?
Facts about forex trading and trading sessions
Before we enumerate the best and worst times to trade, let us first go through some facts about forex trading and trading sessions. First of all, the busiest and the most trading volume and transactions are the best opportunities when one trader can make a forex trade because they pose high volatility.
The busiest trading session goes to the London trading session, also known as the European trading session. However, we cannot skip the part where some other or all markets create massive movements as well. Generally, the middle of the week is the busiest time of the week. We can also add Friday to the list of busy times but only until noon EST because it lays low on the latter part of the day until it closes shop at 5:00 pm EST. Traders tend to close their positions early before the weekend starts to avoid risks caused by data and news releases. Traders would not want to risk it.
In general, these are important ideas that a forex trader needs to know. But in this article, we are about to learn more.
Tell me more about forex trading and timings
The forex market is open for 24 hours, but it is unnecessary to trade all and trade in all sessions. First of all, a person needs sleep, and second, massive moves and action do not happen all day. What a wise forex trader needs to do is know when to trade and when not to. The following topics below will tell us more about the best and worst times to trade.
Knowing when are the most optimal times to trade
A forex trader must know all the week's peak and busy times to become successful in trading. Now, let us enumerate some of the most important things that a forex trader needs to know.
First of all, let us repeat that the most movement happens in the middle of the week. Most of the significant currencies usually have a wide pip range. Among Tokyo, New York, and London trading sessions, the London trading session tends to be the busiest of them all. It is also worth noting that overlapping trading sessions are good times to trade. However, overlaps are not always synonymous with massive movements as Tokyo and London trading session overlap tend to have fewer activities and movement. In contrary to this, the London and New York trading session is where most actions happen. Many massive movements also occur when there are big news, data, and press releases that cause volatility. A wise trader will take note of the markets' opening and closing times.
Knowing the bad times to trade
It is essential to know the best time to trade to be successful in trading. But at the end of the day, that might not be enough unless you know when to hold back and choose not to trade.
In the latter part of
Friday, before the market closes, the New York session has minimal liquidity.
It is also not too wise to trade on Sundays and Holidays since people are busy
with other things like social life. A trader may also consider not risking it when there are major news
events.