All forex traders have a different amount of time to dedicate to trading. Some of us may only get online a few times a week, while others are on as often as possible in an effort to take advantage of the market’s 24-hour a day operating time. Still, it’s impossible to be online 24/7 because you need time to eat, sleep, and recharge, along with taking care of other daily tasks.
There’s one way around this if you want to be online as much as possible – you simply need to know when the best times to trade and not to trade are so that you can be as productive as possible when you’re online. In addition to knowing the best times to trade, you’ll also need to know when the worst times are so that you can avoid them altogether. This way you can have more free time without feeling guilty while avoiding the worst market hours so that you’re less likely to lose money! It’s a win-win either way, so break out that book you’ve been dying to read, get some chores done, or just take a nap and enjoy having the time to do things you’ve been putting off.
The BEST Times to Trade
- One of the best times to trade is when two market sessions are overlapping because pip movement tends to skyrocket. Major news events can also cause volatility and lead to a lot of trading opportunities during these times. This includes the US/London session (8 a.m. to noon), the Sydney/Tokyo session (2 a.m. to 4 a.m.), and the London/Tokyo session (3 a.m. to 4 a.m.).
- The London session usually tends to be the busiest of the three sessions we mentioned above, making the hours of 8 a.m. to noon the most ideal for trading.
- The beginning of the week can be slow, but things usually seem to pick up towards the middle of the week due to the fact that the pip range widens for most major currency pairs during this time.
The WORST Times to Trade
- On Friday, liquidity starts to die down, so it isn’t such a bad idea to have a three-day weekend from time to time.
- On Sundays, most people are off spending time with their family or relaxing, so there isn’t much movement in the markets. Don’t feel bad about taking Sundays off yourself, as you won’t be missing out on much market activity.
- Holidays are another time when it’s perfectly acceptable to take a break, especially when it comes to Christmas day. Your broker’s customer support team will likely be offline as well.
- Anytime major news events are expected to be released, it’s a good idea to avoid the market. Things can get a little crazy during these times, so it’s better not to take chances unless you’re the kind of trader that thrives in this type of market environment.
- If you’re experiencing emotional turmoil in your personal life, it’s best to relax and take a break so that your emotions don’t spill over into your trading decisions. This could be anything from a breakup to a death in the family, so don’t try to convince yourself that your feelings don’t warrant a break.
The Bottom Line
If you don’t want to eat, sleep, and breathe trading 24/7, the best thing you can do is to trade during the most opportunistic market sessions, with the best chance being during the daily London session and during the middle of the week. If you’re feeling upset because you aren’t free during these times, you might want to consider swing trading as an alternative. The worst times seem to fall during periods where many other traders are taking a break, like holidays, Sundays, and Fridays.
Yet another time to avoid trading is when big news releases are expected, as the market can become very unpredictable during these times. Last but not least, you’ll want to avoid trading whenever you’re dealing with emotional issues, otherwise, your emotions might cause you to make avoidable mistakes that can cause you to lose money. After all, it’s better not to trade at all so that you aren’t losing money than it is to trade and lose out.