When it comes to Forex trading, timing can be everything. The Forex market is open round the clock, allowing traders to make trades anytime. However, it is important to note that there are certain time frames when it can be particularly profitable. The best time to trade in forex market may vary from country to country, depending on factors such as time zones and economic events.
For example, in Asian countries, the ideal time slots may come later in the day, while in EU and American countries, they may come earlier. It’s important to keep these time zones in mind when planning your trading strategy. Additionally, there are certain events and incidents that can make technical and fundamental analysis easier, providing an ideal opportunity to make trades. You can remain profitable throughout your Forex trading journey by monitoring these events and taking advantage of the right time slots.
Forex Markets Operational Hours
The volatility and volume of the forex market heavily depend on the operational time of some important forex markets like London, New York, Tokyo, Sydney, and Singapore.
1. London
London is inarguably the biggest forex market in the world. It accounts for more than 40% of global forex trading. London forex market starts earliest in GMT zone. London market opens at 8:00 AM GMT and closes at 5:00 PM GMT.
2. New York
New York is the second largest forex market in the world, as most of the currency pairs are paired with USD. Additionally, the New York stock market is also operational during this period, which can have a powerful impact on USD. New York forex market opens at 1:00 PM GMT and closes at 10:00 PM GMT.
3. Tokyo
Any currency pair having JPY (USD/JPY, EUR/JPY, or GBP/JPY) shows greater movement, so naturally, it is an attraction for traders. Tokyo’s forex market has a high impact on JPY. It opens at 11:00 PM GMT and closes at 8:00 AM GMT.
4. Singapore
Singapore forex market opens at 1:00 AM GMT and closes at 10:00 AM GMT.
5. Sydney
Sydney forex market opens at 10:00 PM GMT and closes at 7:00 AM GMT. It can have a major impact on pairs of currencies with AUD.
Following are the best time slots to trade in forex market.
1. The London-New York Overlap
London and New York are the biggest forex markets in the world, respectively. London-New York overlap is when both London and New York markets are open. London forex market opens at 8:00 AM GMT and closes at 17:00 GMT; New York forex opens at 13:00 GMT and closes at 10:00 PM GMT. The time slot 13:00 to 17:00 GMT is the London-New York overlap. As the two biggest forex markets are involved in this time slot, that is why it has the highest trade volume. This time slot is considered ideal for forex trading because a majority of trading opportunities arise in this slot. USD directly or indirectly influences more than 80% of currency pairs, so it is best to wait until both these markets open up.
2. The Sydney-Tokyo Overlap
Sydney-Tokyo overlap is one of the longest overlaps in the forex trading market. This overlap starts at 11:00 PM GMT till 7:00 AM GMT. In this overlap, other forex markets like Wellington and Singapore remain operational for some time. Although this overlap is lower in scale in volatility and liquidity, it is still an important time frame for the forex market. GBP/JPY (British Pound Sterling to Japanese Yen) currency pair shows the highest movement in the forex market. Another important currency pair to look for in this overlap is EUR/JPY (Euro to Japanese Yen).
3. When The Market is Showing Normal Volatility
Normal volatility is important for earning a stable income in the forex market. Many factors, like high-impact news and global political scenarios, impact the forex market. Before making trades, knowing the intensity of market volatility is important. The question is how to assess normal volatility. There are two methods: a trader must follow the forex calendar. Here, you will know when high-impact news is scheduled and when the market will be highly volatile. Second, using the VIX oscillator, a reading of VIX between 12 and 20 shows normal volatility. Any reading below and above this range falls under low and high volatility. So, it is best to look for trading opportunities when the market shows normal volatility.
4. When Fundamental and Technical Analysis Corroborate Each Other
Analysis is one of the main factors in ace trading. One cannot survive long in forex trading or stock trading without learning it. Technical analysis is the study of charts and patterns to forecast future trends in the market, and fundamental analysis is the study of financial statements and reports from national and international financial institutions. A well-learned trader does his homework (technical and fundamental analyses) before making trades. When you have done your homework and your analysis of both the factors are predicting the same trajectory of the market, you should not miss that trading opportunity; rather, you must go for it. Trading opportunities don’t come too often, but when you are sure about your analysis, don’t delay it because timing also plays an important role in making trades.
5. When A Trader is Sure About High-Impact News
Generally, it is advised to stay away from trading when high-impact news is scheduled. Due to the high impact on the market, this type of news can also provide an ideal opportunity for trading. Forex brokers not only tell about the schedule of the high-impact news but also provide speculative (expected) data from financial experts. Most of the time, the market goes in the direction of what speculative figures suggest. Still, there are a lot of other sources that need to be consulted before making trades on those days. When a trader is sure about the trend of the market before or after the news, they should take a chance of a good trade. And if they have even slight doubt about the news then it is advisable to stay away from making a trade.
All the times mentioned in this article are in the GMT zone; you can convert them according to your country’s local zone for better understanding.
The Bottom Line
In the fast-paced world of forex trading, it is crucial to identify and capitalize on opportunities as they arise. This often entails monitoring multiple time zones and monitoring key events that can impact the market. A skilled trader understands the importance of these factors and uses them to their advantage to maximize profits.
