Best Days of the Week to Trade Forex

Different countries lie in different time zones and so the opening hours are different for each. This results in the possibility of trading all day and all night. The Asian-European overlap forex trading overlap refers to the period of time when the Asian and European trading sessions cross over, resulting in an increase in trading activity and liquidity. The overlap can create volatility in the market, providing a faster-paced market and the potential for more trading opportunities. While the forex market is open 24 hours a day, 5 days a week, it doesn’t mean all trading hours are created equal.

The New York session, also known as the North American session, generates 16% of global forex volume. Unlike the other two sessions, the Tokyo session has significant volume at the finish. A teacher with 8 years of experience and the author’s methodology. For your convenience, the picture below represents the working hours of the sessions in UTC format.

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As you know, demand for the national currency increases at the opening of the trading session in this country. Demand for the Euro is increasing during the European session. At nights trading slows down as European companies are closed and business with other foreign companies is decreasing.

Therefore, anyone interested in making a profit should follow global news that might directly impact different sessions, especially the overlaps, and calculate pips accordingly. It is best to avoid trading currencies, equities or anything if you do not have the right mindset. Once emotions start messing with your decisions, it will show on your account balance. Every trader will feel the toll of Forex, your mood will swing in the same way as your profits and losses.

London and New York Overlap Session

The bid price is the price at which the trader can sell the currency while the ask price is the price at which the trader can buy the currency. The difference between the bid and ask price is known as the spread. The risks of loss from investing in CFDs can be substantial and the value of your investments may fluctuate.

• The foreign exchange market is an OTC or over-the-counter market – it functions without a centralized exchange.
• On the other hand, the volatility of South East and South Asia traders for their pairs would be sufficiently lower in their time zones.
• Then a trading session opened in the morning and quotes were issued with huge price gaps (30% and more).
• Furthermore, many new traders find it hard to take breaks from the market.
• Therefore, anyone interested in making a profit should follow global news that might directly impact different sessions, especially the overlaps, and calculate pips accordingly.
• Thus, when the Tokyo forex session opens, they will focus on the Japanese Yen.
• Traders gain various benefits from sticking to a trading schedule.

The researchers concluded that this period offered the best profit opportunities, albeit at the expense of higher risk. The USD is involved in almost 90% of currency exchanges, and therefore, it is more profitable to trade during overlaps or respective country’s session. Conclusively, keeping these factors in mind would reap benefits for traders.

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Examples include the global financial crisis 2008 and the COVID-19 pandemic, which led to significant exchange rate movements as markets responded to unprecedented circumstances. The next section will delve into a detailed analysis of the best times to trade this major Forex pair. Nevertheless, for traders looking to maximize potential profit from major price swings in the GBP/USD Best Time to Trade Forex pair, the London/New York overlap should be a primary focus. For the GBP/USD pair, the highest levels of volatility are generally observed during the London and New York sessions, especially during their overlap. Moreover, overlap sessions also increase regional market activity. For example, Tokyo and London sessions overlap between 05 AM and 06 AM GMT+1 during summer.

The fact that the Forex market never sleeps means it’s easy to overtrade. Obviously if you’re located in a part of the world where the London / New York session overlap occurs at 3 AM, this may not be the most advantageous for your lifestyle. The most obvious, and the most heavily traded, is the London / New York overlap. Put simply, a retail trader is someone who buys or sells for their personal account, and not for another company or organization. IG International Limited is licensed to conduct investment business and digital asset business by the Bermuda Monetary Authority.

The main question here is when and how one can access the market. Brokerage services in your country are provided by the Liteforex (Europe) LTD Company (regulated by CySEC’s licence №093/08). While it is true that the spot market is open 24/5, the futures market is linked to physical exchange centers. More specifically, it is tied to the Chicago Mercantile Exchange and a web of others throughout the U.S. and abroad. Once you have this information, you can decide whether you want to trade during or outside of these volatile periods – both bring with them their own pros and cons. All reviews, research, news and assessments of any kind on The Tokenist are compiled using a strict editorial review process by our editorial team.

EST, as this is the time when both markets on each side of the Atlantic are open. As a result, the market experiences a lot of trading activity and liquidity, making it a good time to trade for those who want to take advantage of the volatility and volume. Active https://www.bigshotrading.info/blog/stop-loss-vs-stop-limit-orders/ pairs to trade during the Tokyo session are any JPY cross, such as USD/JPY or EUR/JPY. The table below has information about some popular forex pairs and their average daily pip movement over a 12-month period starting November 2018 during the London session.

Moreover, this is also why the European session open is considered the most liquid and active trading session because a majority of the major currency pairs are traded during this time. This includes the GBPUSD, EURUSD, USDJPY, USDCAD, and AUDUSD. There is often big market participation and good volatility when the London session opens.