Knowing what the best times to trade Forex are is a crucial component to effective and efficient Forex trading. During the trading week the Forex market is open 24 hours a day, but just because it is open around the clock does not mean prices are always moving in a way that makes a particular market worth trading. Money is made in the Forex market when the market is volatile and moving, not when the market is calm and relatively quiet.
So, as a Forex trader you need to know when the most active Forex trading times are, as this will aid you greatly in the timing of both your entries and your exits as you trade the markets. The two most active Forex trading sessions are the London session and the New York session, during these sessions price action provides the best trading environment. The Asian trading session is often less volatile and thus less likely to result in major moves within the various Forex pairs.
The Forex market contains three distinct trading sessions; trading starts in Australia and Asia, and moves around the globe into Europe and finally ending the day in North America as trading closes each day in New York. The various Forex trading hours are as follows:
вЂў Asian trading session (including Australia and New Zealand): the Asian trading session opens at 6:00pm EST and closes at 4:00am EST
вЂў London trading session: the London trading session opens at 3:00am EST and closes at 12:00pm EST.
вЂў New York trading session: the New York trading session opens at 8:00am EST and closes at 5:00pm EST.
As you can see from the above list of times to trade Forex, there are periods each day where the sessions over-lap each other. It is within these periods when volume and volatility typically rise to peak levels. The London and New York trading sessions over-lap between 8am and 12pm EST, this is typically considered the best time to trade Forex. The reason it is considered the best time to trade is because this is when the worldвЂ™s two most active trading centers cross; as London trading comes to an end, New York trading is opening, and they are both open at the same time for 4 hours each trading day. As a result, many traders strictly trade within this 4 hour window because it generally brings the best liquidity and volatility.