Know The Best Time Of The Day To Trade Forex

Now, try this quiz on yourself: what time of the day has the highest in TV ratings? Did you say Prime Time? If that’s the case, then you are correct!

Well, you might be wondering; what is the connection between this and forex trading sessions, huh? Alright, similar to your “TV ratings,” liquidity is right at their peak when there are more traders trading in the forex markets. You get the drift now?

Logically speaking, one would think this takes place during the existence of overlap between two sessions.

If that’s what you have been thinking, you would only be right halfway.

To clarify your doubts, let’s discuss some of the notable features that constitute the two overlap sessions.

The Tokyo-London overlap

During this session, the liquidity range is very thin for some reasons. Normally, there is no much movement during the Asian session, hence immediately the afternoon set in, it becomes like living in a graveyard.

With traders in Europe just beginning to enter into their offices, liquidity dries up like a ‘Bonga fish’ and trading can be as boring as when you’re staring into outer space.

This time is the best if you want to relax, play some games or search for potential trades to deal on for the New York and London sessions.

The London—New York Overlap

This is the period when stamina will either pop or prevail as the real deal begins. Literaly speaking, you can even hear participants cracking their knuckles within this time because they are quite aware that they havee a lot of work that must be done.

The overlap between these two sessions is the busiest of the entire day, as participants from both sides—London and New York—the two largest financial centers, commence “trading hostilities.”

This is the period where people can witness large transactions and big moves, especially when news reports started filtering in from the U.S and Canada.

Also, the market is not immune to late news coming forth from Europe.

If it happens that one or more trends are established as at when the European session is active, that same trend may continue, as traders in the U.S decide to jump in and cement their positions after they have read about what happened previously in the day.

But, to be on the safe side, you should be more careful and watch out for the end of the session, because while some European traders are closing their positions, it could result in some choppy moves just before lunchtime in the U.S.

  • BrokerEUR/USD
    CMC Markets 0.7pips. (variable) margin: 3.33%
    IG 0.6pips (fixed) margin: 3.33%
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