Did you know that you need to trade at specific times of the day in order to make a good profit? Here are some of the best and worst times to trade Forex:
Best Times To Trade
European-North American Overlap: this is the time when both the New York and London trading centers are open. During this time, you are able to trade using all the European currencies. The best time to trade is between 8:00 AM and 11:00 AM in New York and between 8:00 Am and 20:00 AM in Frankfurt.
The best currencies to trade during this time are: USD/CHF, GBP/USD, EUR/USD. It’s also wise to go for any other currency pair involving the United States and an European nation.
Asian-European overlap: Tokyo, Singapore and Hong Kong overlap Frankfurt and London trading centers creating a great trading time. The best currencies to trade during this time are Japanese Yen and European Yen crosses.
Australian-Asian overlap: here the Australian and New Zealand markets overlap the Asian markets of Hong Kong, Singapore and Tokyo. The best currencies to trade during this time are Australian and New Zealand dollars. You should also trade the crosses of these currencies. Great pairs that you should go for are: AUD/USD, EUR/AUD, AUD/JPY, NZD/USD, NZD/JPY and AUD/NZD.
The best time to trade is from 9:00 PM until Midnight as this is the time when Tokyo, Singapore, Australia, Hong Kong, and New Zealand markets are all open at the same time.
Worst Times To Trade
Just like there are the best times to trade, there are equally the worst times to trade. The worst times to trade include:
Thin markets: the New York market is the most active market and runs from 9:00 AM to 5 PM. When it closes, there are other markets in Australia and New Zealand that you can trade; however, they are very thin. The price spreads in these markets might widen a lot thus putting you at a higher risk of losing money.
After news breaks: political and economic news tend to create a whiplash effect in the Forex market thus making it impossible to tell the direction that the market will take. To avoid losing money, you should avoid trading immediately after news breaks. This is to enable you to first understand the direction of the market.