Best Forex Trading Times Based on Global Market Movements
Traders typically search for the best times to trade based on what suits their specific strategies to ensure the highest success rate for their trades.
Before selecting trading times, let's first learn about the trading hours in the Forex market.
Forex Market Trading Hours
The Forex market operates 24 hours a day, five days a week, from Monday to Friday The trading day is divided into four main periods:
- European Session: From 8:00 AM to 5:00 PM GMT.
- US Session: From 1:00 PM to 10:00 PM GMT.
- Asian Session: From 12:00 AM to 9:00 AM GMT.
- Australian Session: From 10:00 PM to 7:00 AM GMT.
Most Liquid and Least Liquid Periods in Forex
After understanding the market's trading hours, we should also recognize the periods with the highest and lowest liquidity.
The European session is the most liquid trading period, accounting for approximately 37% of total trading volume, followed by the US session, which makes up about 19% of the volume. Next is the Australian session, and finally, the Asian session, which is the least liquid and tends to have more volatile price movements compared to the other sessions.
Best Forex Trading Times
Now, let's discuss the best times to trade.
The optimal trading time starts with the European session, as it is the most liquid, so most traders rely on market movements during this period.
Following this, the overlap between the European and US sessions is another period with high liquidity, making it a prime trading time.
However, it's important to note that although these times are considered the best for trading, your strategy should depend on the liquidity and price movement in the markets. Some traders may even prefer the Asian session, with its lower liquidity, because they focus on the smaller movements of certain currency pairs, particularly the Swiss Franc, based on their specific strategy.
