Best Currency Pairs to Trade at Night What You Need to Know

When trading is heavier in particular currency pairs, it can give a trader the edge needed to make a profit. This is especially true for short-term traders who use strategies such as scalping or day trading. However, it’s important to bear in mind that greater volatility also presents higher risks of losing money. It is important to take advantage of market overlaps and keep a close eye on news releases when setting up a trading schedule. Traders looking to enhance profits should aim to trade during more volatile periods while monitoring the release of new economic data. Night trading may also create opportunities for traders to profit from retracement of large gains or losses in currency pairs during the US and European sessions, as they can often pull back during night trading.

  1. That said, we are still only at the beginning of the economic response to COVID-19—in the end, this will only broaden our understanding of such events and give us experience in how to navigate it as traders.
  2. The one-minute time frame is also an option, but extreme caution should be used as the variability on the one-minute chart can be very random and difficult to work with.
  3. The beauty of this approach is that technical analysis can be applied on both time frames to achieve greater conviction for the trade.

Some experts agree that it has done wonders for forex trading; completely re-energizing the market. A recent Refinitive webinar took a closer look at which factors are affecting the demand for the U.S. dollar. The following table lists several common currency pairs, as well as the average movement in pips per day over a 12-month period. In addition to low spreads, user-friendly trading platforms, and research tools, US traders should look for a forex brokers regulated by the Commodity Futures Trading Commission (CFTC).

High Volatility and News Releases Impact

Markets are open 24 hours a day all over the world, but closed on weekends and holidays. The New York session is open from 8 a.m to 5 p.m EST on weekdays and can be greatly influenced by market data from the New York Stock Exchange. News from the exchange has a significant effect on the dollar index.

Forex Trading During Time Zone Overlaps 🌍

Certain currency pairs are affected by crossovers more significantly than other pairs are. Let’s look at a concrete example – the GBP/USD and USD/EUR currency pair experience higher volumes when New York begins finding its groove – usually, at the same time, London is in the middle of a full-blown breakout. The first thing to point out is that the best time to trade is when the market is at its most active.

What is the best time to trade forex and why?

Since currency prices fluctuate from second to second, a daily “reference point” is needed. Five Minute Finance has influenced how I see finance – I rely on it for insight on the latest news and trends at the intersection of finance and technology. We’ve gone through a good bit of information but really, it’s all quite straightforward. You can start off by getting organized – when creating your trading schedule, know exactly when and which markets are overlapping. Like many other investments, you can earn significant profits, but you could also suffer losses. Yarilet Perez is an experienced multimedia journalist and fact-checker with a Master of Science in Journalism.

This eliminates one of the downsides of longer-term trading in which entries are generally placed on the weekly/daily charts. Swing traders will check the charts a couple videforex review times per day in case any big moves occur in the marketplace. This affords traders the benefit of not having to watch markets continuously while they’re trading.

You have to feel comfortable with the time frame you’re trading in. This time frame is longer, but not too long, and trade signals are fewer, but not too few. If you are trading the New York session, it starts at 8 a.m., so it is important as a trader to be well prepared for the session ahead of the open, which means waking up well before the open.

Four forex trading sessions and what they mean for traders

To be precise, it becomes active when it is still Sunday night in Europe. In this article, we will see what those best days are and why they are the best. We will also see how volatility decreases and increases throughout the week. You’ll definitely need your rest if you plan on becoming a hotshot currency trader. The more active the market, the tighter the spreads you’ll get and the less slippage you’ll experience. You can make money trading when the market moves up, and you can even make money when the market moves down.

For example, the Pacific session, in territories such as Australia and New Zealand, is the first of the day, followed by the Asian session. Then comes the European session, and after that, the final session of the day is the U.S. or New York session. Such data lets us improve the user experience of our web service. You also have to consider the amount of capital you have to trade.

Trading on Mondays

In general, the more economic growth a country produces, the more positive the economy is seen by international investors. Investment capital tends to flow to the countries that are believed to have good growth prospects and subsequently, good investment opportunities, which leads the country’s exchange strengthening. If you only have three days a week to trade, pick Tuesday, Wednesday and Thursday. If you trade when there is more action, you will see better results.

Your ability to make money trading forex depends on the proportion of trades you profit from and the size of your profits, not necessarily the time you spend. New forex investors should consider opening accounts with firms that offer demo platforms, which let them make mock forex trades. With the practice trades, you can tally gains and losses to see how you would perform with real trading.

Traders who prefer a more relaxed trading environment may choose to trade during the Tokyo or Sydney sessions. Ultimately, traders should choose the best time to trade based on their personal schedule and trading strategy. Forex trading is a 24/7 global market where investors exchange currencies from different countries. With the market constantly active, traders often wonder what the best time to trade is. The answer to that question depends on several factors, including market volatility, trading strategy, and personal schedule. In this article, we will explore the best times to trade on forex and why.

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