The forex market is usually most active when the market hours overlap between sessions, as this is when the number of traders buying and selling each currency increases. It is important to take advantage of market overlaps and keep a close eye on news releases when setting up a trading schedule. Traders looking to enhance profits should aim to trade during more volatile periods while monitoring the release of new economic data. When looking at when to trade during the daytime, it is important to consider when a week officially begins in the forex market.
As you probably already know, the forex market is open and active 24 hours a day, seven days a week. Traders can log onto a trading platform at any time to move currency around, but this doesn’t necessarily mean that people should be trading around the clock. Traders should also be aware that many forex platforms will, by necessity, have larger buy-sell spreads on most currency pairs overnight. The most volatile days of the week to trade is Tuesday, Wednesday, and Thursday for most currency pairs. Overnight positions refer to open trades that have not been liquidated by the end of the normal trading day and are often found in currency markets. Forex market hours refers to the specified period of time when participants are able to transact in the foreign exchange market.
Liquidity refers to how easy it is to quickly buy or sell securities for a fair price. If there is high liquidity the bid/ask spread will be tighter and you can trade more without moving the market. On the other hand, in an illiquid market the spread https://www.bigshotrading.info/ between the bid and ask may be very wide and not very deep. I general, liquid currency pairs are those that are active and have high trading volume. Typically, the UK forex market is most active just after the open of the London session at 8am .
So be on the lookout for important events on the weekends, but otherwise, steer clear from trading during them. Forex markets are often most active shortly after institutions open their doors and start working. Head over to the City Index Academy for curated courses designed to get you started on the markets. The My Trading Skills Community is a social network, charting package and information hub for traders. Access to the Community is free for active students taking a paid for course or via a monthly subscription for those that are not.
Is Forex Trading At Night Profitable?
There will be times when a forex pair throws up strange price action, without any notable rhyme or reason. Random moves may give the market an exciting feel, but what they generally make for is rocky trading terrain. This means that it can be extremely difficult to grasp what is causing such price shifts and the general market sentiment.
Forex market hours are derived from different geographical trading sessions, meaning you can trade forex around the clock. Here, we explain the different forex market opening times, and the best times to trade forex in the UK. With that said, the second half of Monday in the UTC timezone is when the initial surge in volatility and market overlap really begins. We said that Tuesday has almost 150% more volatility compared to Monday. So, all in all, Monday is a high-risk, high-reward trading day that veteran traders can capitalize on.
Best Time to Trade EUR/USD
But if you know your way around, there are still good trading pairs to test on Fridays too. This means that there are not only proper Best Time to Trade Forex hours to trade but also proper days in a week as well as proper weeks in a month, and finally, proper months during a calendar year.