There are many things that you need to understand about forex trading in order to be successful in it. One of them is forex trading hours. While currency trading markets may be open over 120 hours in one week, you must understand that the potentials you may get from these trading hours are not constant or the same. You need to know the right timing for maximizing your probable profits.
Forex Trading Major Sessions
Three major sessions exist in forex. First is London session that begins 0800 GMT and closes by 1600 GMT. Second is the US session starting from 1300 GMT until 2200 GMT. Finally, the Asian session is reasonably quiet in most days of the week. Pairs here move slowly and offer no good opportunities for day trading. Hours in currency trading are not made equal; and so are these sessions. Each session will have its ideal currencies to trade. For the London session, the most active currencies are Euros, Great British pounds and US dollars. US session has active currencies of Euros, Great British pounds, US dollars, Australian dollars and Japanese yen. In the Asian session, only the Japanese yet is worth trading.
Most Promising And Active Hours For Trading
There are trading hours that overlaps with the hours of another session; the closing time of one will overlap with the opening hours of another. At such times, higher volatility can be seen. Highest volatility is typically observed with the overlapping times of US and London sessions. If you trade according to price action and favor the Euro/US dollar pair, the most promising times to trade are during these overlapping hours from 8:00 A.M. EST to 12:00 P.M. EST. This is also the period when many news events about finances and economy in the US and Canada are released.
The Power Hours
As mentioned previously, 8:00 AM-12:00 PM EST is the ideal time to trade and it is referred to as the power hours. Such are the times when both volatility and volume are at peak. High volume means that many of particular pairs are sold and bought. High volatility refers to the fast move and quick trending of prices. The collective forces of volatility and volume can result to movements of large pips in almost all currency pairs traded during these power hours. Ideal currency pairs to trade during power hours are Euro and US dollars, US dollars and Swiss franc, US dollars and Canadian dollars, Great British pounds and Japanese yen, and Great British pound and Swiss franc.
Best Opportunities Based On Currency Pairs
It is still dependent on the currency pairs you are trading which hours are best for you to trade. If you like exchanging Japanese yen and Australian dollars, you would most probably find the Asian session to be most promising.
Worst Time To Trade
If there are best hours for trading that you must take advantage of, there are also worst times you have to avoid. It is the least active time, or more commonly referred to as cold zone. This is when the London session overlaps with Asian session, 2:00AM-4:00 AM EST. At this time, many traders are sleeping or napping. Volume of trade is quite thin; trends are rather unpredictable. Although it is not a good time to trade at these hours, you can still utilize this opportunity to prepare for the London session opening.
Forex Trading Major Sessions
Three major sessions exist in forex. First is London session that begins 0800 GMT and closes by 1600 GMT. Second is the US session starting from 1300 GMT until 2200 GMT. Finally, the Asian session is reasonably quiet in most days of the week. Pairs here move slowly and offer no good opportunities for day trading. Hours in currency trading are not made equal; and so are these sessions. Each session will have its ideal currencies to trade. For the London session, the most active currencies are Euros, Great British pounds and US dollars. US session has active currencies of Euros, Great British pounds, US dollars, Australian dollars and Japanese yen. In the Asian session, only the Japanese yet is worth trading.
Most Promising And Active Hours For Trading
There are trading hours that overlaps with the hours of another session; the closing time of one will overlap with the opening hours of another. At such times, higher volatility can be seen. Highest volatility is typically observed with the overlapping times of US and London sessions. If you trade according to price action and favor the Euro/US dollar pair, the most promising times to trade are during these overlapping hours from 8:00 A.M. EST to 12:00 P.M. EST. This is also the period when many news events about finances and economy in the US and Canada are released.
The Power Hours
As mentioned previously, 8:00 AM-12:00 PM EST is the ideal time to trade and it is referred to as the power hours. Such are the times when both volatility and volume are at peak. High volume means that many of particular pairs are sold and bought. High volatility refers to the fast move and quick trending of prices. The collective forces of volatility and volume can result to movements of large pips in almost all currency pairs traded during these power hours. Ideal currency pairs to trade during power hours are Euro and US dollars, US dollars and Swiss franc, US dollars and Canadian dollars, Great British pounds and Japanese yen, and Great British pound and Swiss franc.
Best Opportunities Based On Currency Pairs
It is still dependent on the currency pairs you are trading which hours are best for you to trade. If you like exchanging Japanese yen and Australian dollars, you would most probably find the Asian session to be most promising.
Worst Time To Trade
If there are best hours for trading that you must take advantage of, there are also worst times you have to avoid. It is the least active time, or more commonly referred to as cold zone. This is when the London session overlaps with Asian session, 2:00AM-4:00 AM EST. At this time, many traders are sleeping or napping. Volume of trade is quite thin; trends are rather unpredictable. Although it is not a good time to trade at these hours, you can still utilize this opportunity to prepare for the London session opening.