Forex Market: The Best Time to Trade

The forex market is affected by global events around the world. It is constantly changing due to forex trades and shifts in government policies. With online trading platforms, it is now possible to trade in forex 24/7. That makes it difficult to identify the best time for trading in the market.

However, market research shows that the most active times for currency-pair trades are when forex markets are open in multiple major economic zones.

Forex Market Activity

The best forex market times will depend on which currencies you are interested in dealing with as a trader. If you are interested in US/EUR pair for example, the best time to trade will be EST 8 AM to 1 PM as markets are open in New York as well as major European economies. If you are looking to deal in other currencies, consult the charts below.

Forex Market: The Best Time to Trade

Trades in Eastern Asian Markets are more active during late evening and midnight in the US.

Forex Market: The Best Time to Trade

Depending on your currencies portfolio, you will find the best hours for trading in the forex market are during the following windows.

  • 3 AM to 4 AM EST: During this time the Tokyo and London exchanges are open and activity is high in JPY-GBP pair.
  • 8 AM to 12 PM (noon) EST: Both the New York and London exchanges are open during this window and it is a good time to trade in USD-GBP pair.
  • 7 PM to 3 AM EST: The Japan, Hong Kong, Australia and Singapore forex markets are open during this time and activity is higher for USD-JPY, USD-CNY, USD-SGD and USD-AUD pairs.

Best Time Doesn’t Mean Most Profitable

It should be noted that high forex market turnover does not necessarily mean profit if you are on the wrong side of the trade. The overwhelming majority of trades in the markets are completed at break-even.

However, if you are trading for short-term profit, you are more likely to get profits when the markets is fluctuating more, which usually happens during high activity trading.

By sticking to the trading windows for the currency pairs that are more active, forex traders can be more successful. They are also more likely to lose on short-term trades made during these periods of activity.

Trading Game Plan

Forex market trading data shows that the Asian markets behave different to peak trading hours than European currencies. Asian currency markets are usually more stable during peak trading hours while European markets tend to be more volatile during early hours.

Trade in European currencies begins to slow down between 2 pm to 6 pm EST which can give traders time to research and understand the way currencies are reacting to affairs on the continent. USD-EUR and USD-GBP are ideal currencies to monitor and trade around this time. On the contrary, trade is far more volatile during early hours between 6 am to 10 am and that is not the ideal time for trading in these pairs.

For Asian currencies, forex markets open with Japan at 7 pm, followed by Honk Kong and Singapore markets at 8 pm EST. The ideal times for trading are between 8 pm to 12 am. Markets become more active after 1 am due to increased trading in EUR-JPY, GBP-JPY and EUR-CNY pairs.

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