The best times of the day to trade forex

HOW? ‘OR WHAT trade Forex or WHAT Traders’ currency pairs are frequently asked questions, but it’s also important to know WHEN to trade …

Indeed, Forex is a 24-hour market, but not all periods are the same when it comes to trading. In fact, there are periods that are more active than others, and the less active the market, the fewer the opportunities.

The different Forex “sessions”

A day in forex can be divided into 3 semesters, depending on the opening of the main financial centers in the world. These sessions are neither official nor clearly defined, since Forex is a market open 24 hours a day, but they are interesting points of reference to know what to do and especially when.

We can therefore identify the Tokyo session, the London session and the New York session, and keep their “plans” approximate:

* Tokyo session: midnight – 9:00 am
* London session: 8am to 5pm
* New York session: 13: 00-22: 00

What are the best times of the day to trade Forex?

The first thing to note is therefore that the sessions sometimes overlap:

* The London session and the Tokyo session overlap from 8:00 to 9:00
* The London and New York sessions overlap from 1pm to 5pm.

These periods are therefore the periods when the volumes should be at their highest, as there are therefore traders from multiple different locations that are active in the market at the same time.

Let’s now take a look at the average volatility of the major currency pairs for each of the three Forex sessions:

Average volatility of currency pairs per session

volatility pairs

We therefore note that the average volatility is maximum during the London session on all major currency pairs, which is explained by the fact that in the 9 hours of the London sessions, 5 hours (from 8:00 to 9:00 and from 13:00 to 17:00) correspond to periods in which two sessions overlap.

What are the best days of the week to trade Forex?

The study of the volatility of the major currency pairs and the table below lead to the conclusion that the most active days of the week, on average, are Tuesdays, Wednesdays and Thursdays:

volatility per day

This does not mean that trading is to be avoided on Mondays and Fridays, but the opportunities will be fewer. Additionally, Mondays and Fridays are often more difficult to trade due to portfolio adjustments at the start of the week and profit-taking at the end of the week.

To remember

  • You need to know how to choose which currency pairs to trade on a per session basis (for more details, see your study on the volatility of different currency pairs).
  • The busiest times of the day are between 8:00 and 9:00 and between 13:00 and 17:00 (overlapping sessions).
  • The busiest days of the week are Tuesdays, Wednesdays and Thursdays

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