Market Hours
So far, all the lessons we have taught you deal with “how” to trade the forex market. But another important lesson that you need to learn is “when” to trade the forex market.
Yes, it is true that the forex is open 24 hours a day, but that doesn’t mean it’s always active the whole day. You can make money in the forex when the market moves up, and you can even make money when the market moves down. However, you will have a very difficult time trying to make money when the market doesn’t move at all. This lesson will help determine when the best times of the day are to trade.
Market Hours
Before looking at the best times to trade, we must look at what a 24hr. day in the forex world looks like. The forex can be broken up into three major trading sessions: the Tokyo Session, the London Session, and the U.S. Session. Below is a table of the open and close times for each session:
You can see that in between each session there is a period of time where two sessions are open at the same time. From 3-4 a.m. EST, both the Tokyo and London markets are open, and from 8-12 p.m. EST, both the London and U.S. markets are open. Naturally, these are the busiest times during the market because there is more volume when two markets are open at the same time.
As you can see, the London session usually shows the most movement.
Now let's see which days of the week are best for trading...
Best Days of the Week to Trade
Best Days of the Week to Trade Forex
Ok, so now we know that the London session is the busiest out of all the other sessions, but there are also certain days in the week where all the markets tend to show more movement. Below is a chart of average pip range for the 4 major pairs for each day of the week:
You can see that during the middle of the week is where the most movement is seen on all 4 major pairs. Fridays are usually busy until 12pm EST and then the market pretty much drops dead until it closes at 5pm EST. This means we only work half-days on Fridays. The weekend always starts early! Yippee!
So based on these three simple pieces, we’ve learned when the busiest times of the market are. These are the best times to trade because they give us a higher chance of success.
If you're feeling down in the dumps and wish to lose money, these are the times to trade...
When to Trade if You Want to Lose Money
Here at BabyPips.com, we don’t like to force our opinions on you. Instead, we want you to make your own decisions when it comes to your own trading. If you really do not want to trade during the busier times of the market when trade volume and pip movement is highest and where you will make money easier, then by all means, feel free to trade on these times mentioned below. We guarantee you’ll have a more difficult time trading!
Fridays: Fridays are very unpredictable. This is a good day to trade if you want to lose all the profit you made during the rest of the week.
Sundays: There is very little movement on these days. Trade this day if you want to start off your week with NEGATIVE pips.
Holidays: Banks are closed which means very little volume for whatever country is having the holiday. Holidays are great to trade when you would rather lose your money than take a day off and enjoy the other finer things in life.
News Reports: No one really knows where the price will go when a news report comes out. You could lose a fortune trading during news releases if you don't know what you're doing. Price acts like a drunken monkey during these times and become unpredictable.
Can't Trade During Busy Market Hours?
What to do if you can’t trade during the busy market hours
If you live in a crappy time zone or you have a day job, then you probably can’t sit in front of a computer during the busy market hours. If this describes you, then I have a few solutions for you:
- Move to a better time zone. Move to London preferably. Sure you’d have to pack up and start a whole new life, but hey, at least you can trade right?
- Trade at work (be sure you have some “real” work ready just in case your boss sneaks up behind you and asks what you’re working on). I also recommed you master the ALT-TAB key combination (if you use Windows) so you can quickly switch windows at a moment's notice. This option can be the ultimate perk because your employer is basically paying you while you trade forex. Gettin' paid while gettin' paid if you know what I'm sayin'.
- Become a swing or position trader. As a swing/position trader, you won’t have to constantly monitor the markets and you can check or look at them when you get off work.
- Trade a different session even if it’s not the busiest one. If you can’t trade the London or U.S. session, then trade the Tokyo session. However, you should be disciplined and trade it every day. You will start to learn how it moves and can develop strategies that are specific to that session.
We think 3 and 4 are your best options, but again, the choice is up to you.
Even if you can’t trade, it’s good to watch the charts for a full session. By getting use to seeing the price movement in action, you can actually see the real story of the currency. Watching the charts live is very different then looking at past charts.
Even if you can’t actually trade the market, make mental notes of when you would take trades while you’re watching the charts live. Practice makes perfect, and the more you do it, the better you’ll get at it.
The Choice Is Yours
There you have it! We’ve given you all the information you need regarding when the best times to trade are. All you have to do now is decide whether or not you would rather trade when it’s easier to make money, or if you’d rather do it the hard way.
Summary
Busiest/Best times to trade:
- When 2 sessions are overlapping: 3-4am EST and 8am-12pm EST
- The London session is the busiest out of the other two.
- The middle of the week typically shows the most movement.
Worst times to trade:
- Fridays
- Sundays
- Holidays
- News Events
- During Desperate Housewives or American Idol episodes
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