Have you ever wondered about the best time to trade forex? Then you need to read this work to find out the most favorable time for trading. But before then let’s refresh our minds on the meaning of forex.
What is Forex?
The forex which is an abbreviation for foreign exchange market, is a decentralized market where all the world’s currencies are traded. The market is open 24 hours a day, five days a week, because there’s always at least one financial center in the world that’s open for business.
What is the best time to trade forex?
The best time to trade forex is when the market is most active and therefore has the highest volume of trades.
There are three main forex trading sessions: the Asian session, the European session, and the North American session. Each session has its characteristics and can affect currency pairs differently.
The Asian session, which is also known as the Tokyo session, starts at midnight GMT and runs until 9:00 AM GMT. This is the quietest time to trade as the markets in Japan and Australia are the only ones open. This is also the time when the fewest number of traders are active in the market, which can result in lower trading volumes and volatility.
The European session, which is also known as the London session, starts at 9:00 AM GMT and runs until 5:00 PM GMT. This is the busiest time to trade as the London financial center is the largest in the world. It is also the time when the majority of traders are active in the market, which results in high trading volumes and volatility.
The North American session, which is also known as the New York session, starts at 1:00 PM GMT and runs until 10:00 PM GMT. This is the third busiest time to trade and is when the markets in the United States are open. It is also the time when the largest number of traders are active in the market, which results in high trading volumes and volatility.
In all, the best time to trade forex is during the European session and the overlapping time between the European and North American sessions, which is from 8:00 AM GMT to 12:00 PM GMT. During this time, the markets in both Europe and North America are open, resulting in high trading volumes and volatility, which is ideal for traders looking to maximize their profits.
A simple guide on how to trade forex
Here is a simple guide on how to trade forex for beginners today:
- Start with education: Before you start trading, it’s important to educate yourself on the basics of the forex market and the key concepts such as currency pairs, exchange rates, pips, and leverage.
- Choose a broker: Ensure to choose only the best forex brokers. The best brokers are known for: charging low commissions, regulations, and providing multiple currency pairs for trading.
- Create a trading plan: Define your investment goals, risk tolerance, and strategies. Keep your plan simple and flexible, and review it regularly to ensure you are on track.
- Open a demo account: Most brokers offer demo accounts where you can practice trading with virtual money and get a feel for the market.
- Place your first trade: When you’re ready, place a trade with a small amount of money to get a feel for the market. Focus on quality over quantity and don’t be afraid to cut losses.
- Monitor your trades: Keep track of your open positions and regularly assess their performance. Adjust your plan as needed, but avoid making impulsive decisions.