One of the best advantages in Online Trading Platform is the ability to trade for twenty-four hours each day throughout the week. Traders have the freedom to trade as and when they choose, depending on particular interests.
But when are the best market times to trade?
The best market time to trade on the Forex Review is when the market is most active. When traders are more active, trading spreads tend to narrow. The result will be less of your money goes to the broker or market maker, and more to buyer and seller.
The forex market time consists of multiple trading sessions: European session, American session, and the Asian session. They are also known as London, New York, and Tokyo or Sydney sessions. There is no single exchange in the market, and different countries trade at different market times.
Here are the operating hours in Greenwich Mean Time (GMT):
- Sydney – 21:00 – 06:00
- Tokyo – 23:00 – 08:00
- London – 07:00 – 16:00
- New York –12:00 – 21:00
Each exchange is independent of the other, and they are all trading the same currencies. Meaning, when two of these exchanges are open, the number of traders active increases significantly.
Bids and asks on one exchange are immediately reflected in the bids and asks on any other open exchange. This will both reduced market spreads and increases volatility.
Let’s see some of the characteristics of the two overlap sessions to see why.
Tokyo – London Overlap
During this session, liquidity is low for a couple of reasons. Usually, there isn’t as much movement during the Asian session. When afternoon strikes, it’s pretty much quiet.
As European traders are just getting ready to work, trading can be really slow as liquidity dries up.
This is a good time to relax, sort out your strategies, or watch the news for potential trades for the next session.
London – New York Overlap
This is the busiest day of all the market times, as traders from the two largest financial centers begin to lock horns. This period draws out big moves, especially when news reports from the US and Canada are released.
Additionally, the market can also be affected by late news from Europe.
If any trends were set up during the European session, we could see the trend continue, as US traders decide to join in, and establish their own positions after reading what happened earlier in the day.
However, be aware that at the end of this session, some European traders may be closing their positions, which could lead to some rocky moves right before lunch time in the US.
So to answer the question of which are the best market times to trade, is when two sessions are overlapping. These are the times where major news events come out potentially triggering volatility and directional movements.
But remember, best market times don’t always mean profit. If you’re just a beginner, it’s ideal to proceed with caution. You can always open a forex account at a broker that offers demo trading, where you can train and practice your strategies, and to see which the best market times are for you.