Although the forex market is open 24 hours a day, 5 days a week, viewing all day long forex charts and trying to trade every news release is nothing but making your way to lose the capital. Although there are three sessions, Asian sessions, European sessions, and new york sessions. Trading opportunities lie these 3 are not the same. So, according to my findings, overlap sessions, more precisely London-new York overlap session, is the best time to trade forex.
Best time to trade forex markets explained
Many beginners and novice traders make this mistake as they don’t know the best time to trade forex to make maximum profit. As a novice trader, you should trade when you think you will be able to make money by trading. For that very reason, you should always pick the most liquidated trading hour.
Less liquidity means less opportunity. If you trade in such a time when there is no volume or less volume, then the chance is higher that you will end up losing your capital.
So try to trade in a volatile market. Now the question is when the market gets volatile during the whole trading day? The answer is simple. When two trading sessions overlap each other, then the market goes crazy. Most of the active traders come to trade at that time. Big banks, hedge funds, and big institutions also trade at that time. Central banks remain active this time. So it would be best if you focused on London and New York overlap. Day trading is the best choice during this overlap!
London new york overlap-Best time to trade forex
Although there are some other overlap sessions like The Sydney/Tokyo markets, overlap, and Tokyo London overlap, market volatility is not that much higher than London -New York overlap, but it still offers opportunities.
So if you want to get the most liquidated market, then this is the perfect one. Remember, when more people participate, the chance is higher, your trading position will go in your direction.
Liquidity remains higher from 3 pm to 10 pm London time which is 10 am in new york time. At this time, Two big exchange houses, the London stock exchange, and the New York stock exchange started their activities. So this is the busiest time of day.
This time many bug reports and data come out from us and Canada, and some other European countries. It is observed that if any trend starts from the beginning of the European session, then US technical traders and London traders just jump out that trend to make some profit and establish the trend. US traders try to read out the market and sort out the opportunities.
Another major important thing, WM/Refinitiv Spot Benchmark Rate, which is overlooked by many retail traders. This rate is set at 4 pm London time. European Traders called it the London fix. This is a reference point. This reference point is very important as the currency exchange rates fluctuate every moment, so a reference price rate is needed. Many big banks and other giant institutions use this daily rate to fix their daily currency rate.
Last but not least, we sometimes observe choppy markets at the end of the London session. This is because individual traders may start to book their profits or exit their positions, and us traders also remain busy at their lunch at this time. This results in choppiness or false moves in the market.
Forex trading strategy during London new york overlap session
Active traders use many trading strategies during this period. From a 1-minute scalping strategy to a 4-hour swing trading strategy all are available for this European session. If you are a scalper then choose a 5-minute strategy. if you are a swing trader then you may choose the 100 pips strategy. For position traders, I will recommend picking a daily strategy based on the 34 EMA indicator.
Major markets currency trading this market overlap time
Although you can trade any major pairs among these 28 pairs, I strongly recommend you to stick to only EUR/USD, GBP/USD, NZD/USD, USD/CAD, USD/JPY, EUR/JPY, EUR/CAD, GBP/CAD, EUR/AUD, GBP/AUD. These are the most popular currency pairs for trading European session.
Major News announcements & economic news releases
Although financial markets are full of plenty of news, all the news does not affect the forex market the same way. There are many news announcements scheduled for this overlap session. Most of these pieces of news are high impacted news events. like the unemployment rate, the balance of trade, inflation rate, and so on of many European countries. So trading opportunity is here in the European session. As a forex trader, you need to watch and observe these news events closely. Without doing so you can’t trade profitably. Many modern apps are available now which gives you even alerts and signals during major news releases time so you won’t miss even a single event!
Worst time to trade
when the market gets choppy and pip fluctuation gets dry like in Asian sessions and market holidays it’s better to stay away from the market. These times are the worst times to trade. Although some range traders still find opportunity during this time as support and resistance strategy works this session.
If you are a day trader then trading during the Asian trading session is like handing over your hard-earned money to a broker. It’s 90% sure that you will lose money treading this session. as volatility goes low so making a profit during this time period is really tough. But if you are a position trader and you use longer timeframes like daily or 4 hours then you can choose any session. Then the Asian trading center would not be a big issue. Actually, trading forex is not a hard task if you can fix your favorable trading times.
The bottom line
As a typical trader, if you try to enhance profits, then you should aim to trade during more volatile periods when major economic data is released. If you know which is the Best time to trade forex then it would be easy for you to pick the most volatile period for trading.
It doesn’t matter whether you are a novice or professional, trading is not your only work. You have to take a rest, go to sleep and hang out with friends, so don’t try to glue your eyes with a computer screen. Rather enjoy your life and come to forex trade when there are opportunities, and be sure that if you trade only in the London -US overlap session, then you won’t miss even a single opportunity.
What does professional traders say about best time to trade forex
“New York and London exchanges centers account for more than 50% of all forex trades”John Russell
“Forex traders tend to focus their energy on specific sessions or time periods”Rebecca Cattlin
“The market is more active when there is a crossover between two sessions. Spreads are tighter that time”Callum Cliffe
“Timing is Everything in trading”Graeme Watkins
“The overlapping of the U.S./London session offers the best trading opportunities “Tim Fries
“The most successful traders perform a higher number of profitable trading transactions in a moderately volatile market “Jack Moore
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