When is the best time and hours for forex trading?

When is the best time and hours for forex trading? - Forex trading can be done 24 hours a day for 5 days a week.

You could say, the forex market continues without rest or sleep. For traders, this is certainly fun because it has the opportunity to double profits at any time.

Trading activities do not have to collide with office hours or time with family. However, forex trading time is divided into several sessions and not every hour forex trading is always crowded.

There are days when the activity is crowded, but there are also times and hours when the trade is quiet even though it includes the forex market opening hours.

The more crowded the forex market, the greater the opportunity for profit; whereas the more empty the market, the less chance of profit.

So, insight into the time and hours of forex trading is very important for traders. You can adjust your trading strategy with the character of each forex trading session.

The goal is to get the most from each of your trades.

Forex Market Time is divided into several main sessions, namely: Sydney (Australia) Session, Tokyo (Asia) Session, London (Europe) Session, and New York (American) Session.

 As we know, there is a fairly long-time difference between Australia and America (around 16 hours). This is what makes the forex trading market never sleeps.

When the market in one country is closed, another market is open and so on. A guide to forex trading hours can be used as a reference, except when the United States and several other countries apply Daylight Saving Time (DST).

When DST, forex trading hours can be shifted 1 hour forward, as well as schedules of important events in the economic calendar.

DST applies between March and November with different dates each year, so forex brokers usually make announcements when DST will start and end.

As an additional reference, you can also look at pictures of forex market opening hours according to Singapore Time (SGT, UTC+8), as follows:

1. Australian session

Although in the Australian session the market movements were not too volatile, but trading in the Australian market is one of the important sessions.

Transaction centers are located in Sydney. The currencies that you might be trading in during this Australian session are AUD and NZD.

 Some characteristics of the Australian market are:
  • In the Australian session, the most influential pair movements were those involving AUD and NZD currencies.
  • At certain times, market liquidity seen in a very small price movement and lasts for a relatively long time, so that a consolidation phase occurs in the price movement of a currency pair.
  • The Sydney market will also have an impact more or less at the next forex trading session, as traders in Asia will see what happened before on the Sydney market, but the effect has not had such a big impact.

2. Asian session

Trading in the Asian market is the one of the important session in the world's forex trading, including the Tokyo session and the Beijing session.

Transaction centers are located in Tokyo, Singapore, Hong Kong, and South Korea.

Some characteristics of the Asian market are:
  • The currencies that you might be trading in during this Asian session are JPY and CNY. In this case, please note that news that affects issued by Japan. Given that China has grown into a new economic power, when they release important news, the movements of the two currencies will also be affected.
  • In addition to Japan, countries with other large economic powers such as Hong Kong, Singapore, China and Korea are also actively conducting transactions. China and Japan are among the main exporters, so in addition to the Central Bank from countries that are active during these working hours, commercial entrepreneurs (export/import) also actively trade currencies.
  • The Tokyo market will also impact more or less on the next forex trading session, because traders in Europe and America will see what happened before on the Tokyo market, before taking a trading decision that day.
  • At certain times, market liquidity (availability of liquid funds) can be depleted. This is seen in a very small price movement and lasts for a relatively long time, so that a consolidation phase occurs in the price movement of a currency pair.
  • Most price movements occur at the beginning of the session, when many fundamental economic news is released or announced.

3. European session

Europe, especially London, has been a world financial center since the era of the Industrial Revolution.

The European market takes the largest portion, which is around 36% of total trade in the global forex market.

About 31% of the trade is carried out in London, while the remaining 5% is in Germany. Correspondingly, the European market is the busiest time and time for forex trading, when thousands of world-class snapper entrepreneurs make transactions between each other.

 Some characteristics of the European market are:
  • During the European session, all currency pairs became very attractive to trade because of the crowded forex market. However, the most profitable movement in the major pair, namely EUR/USD, GBP/USD, USD/JPY, and USD/CHF. Some cross pairs such as EUR/JPY and GBP/JPY can also be glimpsed because the movements are quite large.
  • The London session is a time when forex trading is very crowded. These results in very high liquidity and smaller spreads.
  • Some important news in the Eurozone can greatly influence price movements.
  • The range of price movements becomes very high (volatile).
  • Often, trends that occur in the European session will continue until the beginning of the New York session.
  • During daylight time in Europe, volatility will decrease with lunch breaks and wait for the American session to open.

4. American session

New York is the center of trade and business in America. The city is also nicknamed "City that Never Sleep", meaning the city that never sleeps.

However, New York today is not only an American financial center, but a financial center of the world.

Therefore, it's no wonder that the American session based in New York alone can cover around 19% of total global forex trading. In addition, it is necessary to remember that the US Dollar is currently considered a world currency.

About 90% of global trade in goods and services uses US dollars as a medium of payment, so this American trading session is also an important moment for forex traders.

Some of the characteristics of the New York market are:
  • As in the European market, all currency pairs are very attractive to trade in the American session. However, you must pay more attention to the moment when important news wills and is being released. The US dollar can move wildly and even jump up and down.
  • When important US economic news is released, it will have enormous power to move prices on the market. Remember, 90% of trades involve Dollars.
  • Market liquidity tends to be high during the morning of New York (early trading), due to overlap with the European session.
  • After the European market closes, liquidity and volatility also tend to decline, coinciding with the afternoon trading session in America.
  • Reversal events may often occur over a period of time after the American afternoon session, so traders need to be careful. Some traders do not want to leave open positions at the end of trading on Friday to avoid things or news that might occur on weekends.
  • On Friday afternoon New York time, the trade crowd will drop dramatically, because Asian and European traders have stopped to move, preparing for the weekend holiday.

Crowded or quiet forex market in a certain time is usually measured by the deviation in the difference in price movements of each currency pair.

This deviation is calculated in units of pips, which marks the smallest unit of price movements in forex. Based on the analysis and the authors observe, price movements in the European and American sessions are larger than the Asian session.

The height of trade in a currency is related to the transaction center in their region, but this only applies to certain countries in Europe, America and Asia.

Other regions in the world only contribute 25% of global forex trading, and working hours have no effect on forex trading.

Based on the author's observations, price movements are usually busy on Wednesday, Thursday and Friday. In other words, this time of forex trading provides the most trading opportunities.

So, the conclusion of Time and the Best Forex Trading Hours for forex trading, namely:
  • At the European session, the forex trading time is the busiest and most crowded so that price movements are very volatile and very profitable
  • The overlap of two sessions gave rise to hours of forex trading with increased volatility and market liquidity. This presents an opportunity for you to immediately make a profit in a short time.
  • Forex trading is most crowded in midweek (usually Wednesday, Thursday and Friday price movements are very volatile).
While the time and hours are less suitable for forex trading for some traders, namely:
  • For aggressive type traders, the Asian session becomes less exciting due to low volatility and liquidity. Price movements tend to be slow in this trading session.
  • On Saturday mornings when the market is about to close (after the afternoon session of the American market), some traders have stopped trading, so the market will usually be very quiet.
In addition to the points above, please also note that usually when there are important world events such as the presidential elections, international meetings, and etc. can make market crowded.

While world events like Soccer World Cup, Olympic or another event the market can be quiet because the attention of traders shifts. Then, in determining the hours of forex trading that will be undertaken, also pay attention to your rest time.

Consider this so that you do not transact in physical condition tired or not prime, because it will affect decision making later that can lead to losses.