What is Forex and the Different Ways to Trade Forex ?
How Forex Works and What are Pips and Lot in Forex?
How to Start Forex Trading and Best Times of Day to Trade Forex?
Forex Market Structure, Forex Players and Forex History
Why Trade Forex? Advantages of Forex Trading, Forex vs. Stocks vs. Futures
What is Margin Trading, Used Margin, Free Margin, Balance, Equity, Margin Call Level and Stop Out Level?
How to Start Forex Trading and Best Times of Day to Trade Forex
Forex trading is a highly speculative market where traders can make a fortune or lose all their money in a very short period of time. However, with enough knowledge and caution, forex trading can be a profitable experience. There are numerous factors to consider when want to step in forex trading world, including the best times of day to trade. This education section will enlighten you how to start forex trading and forex market hours.
How To Start Forex Trading for Beginners?
As you already know, forex trading is a very complicated as well as highly speculative market. However, traders can make profitable forex investments with the perfect tools or platforms and an overall understanding of the risks involved. Here are the steps you can follow if you are looking for how to begin forex trading as a newbie.
Step 1: Decide what you want to trade
If you want to trade commodities, such as gold, oil, etc., then you should research and find out which commodities are trending at the moment.
But for newbie traders, it is always best to begin with forex.
Step 2: Find a broker
As soon as you have decided on what to trade, you can start looking for a broker. There are thousands of brokers out there, and almost all of them offer the same services. You should consider a number of factors when choosing a broker.
Step 3: Open a broker account
After you have picked the broker, it’s time to open a broker account. You can open a demo account, or you can open a real account.
Step 4: Set up your account
Once you have opened the broker account, you can now set up an account. Nevertheless, if you are a newbie trader, we suggest you to open a demo account. This is a free account, which allows any traders to practice with a small amount of money or even virtual money provided by the broker. You can learn how to trade with a demo account.
After having some experience using the demo account, you can start trading with a real account and investing some real money.
Step 5: Set up your trading platform
After you have set up your account, you need to set up a trading platform. There are many trading platforms available, such as MetaTrader4, MetaTrader 5, cTrader, and Ninja Trader.
Step 6: Choose your trading strategy
As your broker account and platforms are ready, you can now choose your trading strategy. You should research and choose a strategy that will fit your needs.
Step 7: Research your strategy
After you have chosen a strategy, it’s time to research it. Read all of the information about the strategy and study everything or as much as possible about it.
Step 8: Set up your strategy
After you have researched your strategy, it’s time to set it up. If you are using a demo account, then you should be able to set it up with very little effort. If you’re using a real account, you’ll need to ensure that you have the correct information about your account before setting up your strategy.
These steps will not ensure your profitable forex trading, and you will also need to know the best times of day to trade forex as the market fluctuates from time to time.
How to Start Forex Trading? Forex Sessions Times
It’s a fact that the forex market keeps running 24 hours a day; however, it doesn’t remain highly active round the clock. You can trade money when the market is at its highest active levels with either the market moving up or moving down. In the absence of any such movement, it can be quite hard for you to make money.
This most promising and famous forex market hours is segmented into four major trading sessions –
- New York Session
- London Session
- Tokyo Session
- Sydney Session
The trading hours of the above sessions depend on their local business hours and 7-9 AM is when generally these sessions open and become active. When a particular session ends in the evening, another exchange takes control over the forex chariot. 8 am – 12 pm is considered as the busiest hours of FX when high volumes of money trading occur.
One who is trading at forex should study well about the trading time zones, trading timings and most importantly, about when these sessions observe daylight saving time. You can increase your chances to win by trading during the hours when two sessions overlap as this is the time when the forex witnesses the highest volumes of transactions. London and New York are popular to account for more than 50% of the forex trades.
When Can You Trade Forex
Technically, the forex market hours clock is 24/7, but it is not a good idea to trade when significant markets such as New York or London sessions are closed. So, you have to know the forex session times of the major market so that you can take informed action according to the latest data.
When Can You Trade Forex: Tokyo Session
Tokyo forex market hours is 9 AM to 6 PM local time or 12 AM to 9 AM GMT Time.
Talking about the forex Asian session which means the Tokyo session at Forex, it is essential to know that the Japanese yen is the third most traded currency on the platform and same goes with Japan as it holds the third most traded session of Forex. Tokyo trading session times start at 12 AM GMT, and during its entire working hours, it gets overlapped by two other sessions, Sydney and New York. Tokyo session forex time witnessed around 21% of the FX transaction per day.
Private companies and Central Banks are the leading traders who remain highly active during the Tokyo trading session, Japan’s economy is mainly dependent on exports, and in the last few year China has also emerged as a significant trade player.
The most suitable and trade-worthy time is the early hours when economic and finance-related updates get updated, and FX market rates start rolling. Tokyo forex session also acts as the leader of other sessions because the moves which get set at this session get followed or at least studied by the later coming sessions. Thinning of liquidity is a common scenario in the Tokyo trading session, and traders often wait for long hours to set a good trade. While liquidity gets the stick, currency pairs became immobilized and get glued within a range. It provides a chance to short-day traders or potential breakout traders in the last forex hours of the day.
The majority of the traders like to trade in currency pairs like AUD/JPY followed by USD/JPN. The Japanese yen holds a great place in the FX marketplace as around 16-17% of transactions get done through this JPY.
When Can You Trade Forex: London Session
London session forex time is 8 AM to 5 PM local time or 7 AM to 4 PM GMT Time.
Forex has multiple trading spots in entire Europe, but London drags most traders’ attention. There is no doubt in the fact that London has always been an essential part of various trading markets and the same is the case with FX.
Around 30% of the whole Forex, transactions happen in the London session when thousands of businessmen and traders are doing transactions per minute. European session or London trading session time starts when Asian ones are about to close their shops, this Forex capital of the world crosses its session with other significant FX sessions which are the USA and Asia.
London session forex market open time is at 2:00 am EST and keeps running till 10:00 AM EST, and is considered as the most volatile session with a high frequency of liquidity. While it picks its momentum with high trading volume by arriving mid-hours, 8:00 am EST is the time when the US session starts and overlapping between these two provides better opportunities to traders. London session is the one, where most of the trends begin, pips get spread, and volatility gets down after lunch hours.
There are many times when the FX market shows good possibilities; the best forex market timings are from 8:00 am to 12:00 pm EST which is more crucial and critically important for traders. The majority of trading happens between these 4 hours, and undoubtedly, these are the best forex hours to buy-sell currency pairs during the London session. The most favorable currency pair which people trade in is EURO, US Dollar, the Japanese Yen, and the Swiss Franc.
When Can You Trade Forex: New York Session
New York trading session time is 8 AM to 5 PM local time or 1 PM to 10 PM GMT Time.
New York trading session time is 8 AM to 5 PM local time or 1 PM to 10 PM GMT Time.
New York is the second largest Forex marketplace, the first being London. The New York session forex time or the US forex market sessions attracts a significant number of forex traders owing to the ever-growing demand for its currency US dollar or USD.
Forex New York session time starts when the London marketplace has almost finished its lunch break. As soon as the Forex’s clock for US sessions opens at 8:00 AM EST or 1:00 PM GMT, the major currency pips start moving with big steps. This can be attributed to the fact that when the US traders start rolling their quotes, their European counterparts are already engaged in the process causing overlapping of the two markets resulting in the highest volatility and liquidity.
The most favorable time to start forex trading in the New York session is as soon as the session opens. Once the New York session forex reaches lunch break, the European market gets closed and the liquidity and volatility take a hit and begin to die down. So, it’s advisable to make trades before the lunch hour focusing on the most economic updates and news.
Considering the fact that around 80-85% of the forex trading involves USD, being an early bird is what this session asks for. Fridays are the days with the least mobility in pips as both the European and Asian markets remain mum forcing the US traders to close their shop after a half day. The most traded currency pair in the US session is USD and EUR.
Best Times of Day to Trade Forex
Best time to trade Forex is one when the majority of FX traders are trading. One can compare it to the TRP of a television show; the more people watch it, and more it becomes popular. Similarly, a significant frequency of traders will give more liquidity, ultimately resulting in favorable trading. Depending upon the overlapping sessions, people often prefer to trade during those times, as two markets open at the same time will give more opportunities. Well, this is partially correct but if you want to be a long runner, understand the pattern and trading sessions.
The majority of traders like to trade in Asian, European, and American forex trading session times, Forex itself being the most significant and unique marketplace, its week starts from 6:00 pm EST on Sunday and keeps running till Friday 5 pm. To check the best time, try to trade when more than one marketplace is open, as it provides mobility in pips. Trading with one marketplace open freezes pips, and you can observe low movements. Another essential thing to know is that whenever a piece of recent news flashes in the world, particularly news or event related to the economy, the Forex market gets affected by it.
A piece of sudden news from the finance department of a country holds the power to rise or down the exchange rates and that this is the most convenient time for a trader. As rates change within seconds, FX traders become active, and pips start changing rapidly. In concluding this topic, we can say that the most preferable times of a day are when two or more markets are opened, when there is a high volume of FX (generally midday), and last but not least when a new economic update comes.
Best Days of the Week to Trade Forex
If you go by the volume of movement that London witnesses during its trading hours, it is undisputedly the busiest session of the forex market. However, this doesn’t imply other sessions do not receive high movement. All forex markets have a few days in the week when trading volumes reach very high levels.
It is impossible to confidently pinpoint a particular day of the week when the forex market exchange provides the highest opportunities. However, based on the stats and previous trade patterns, the successful and experienced traders on Forex prefer the days of the midweek like Tuesday, Wednesday, and Thursday which present more opportunities for a profit considering the volatile nature of the market during those days.
Mondays tend to be not-so-good forex market days to trade as price movement tends to be slow with most of the forex traders still undecided trying to get some sense of the direction of the market. Fridays are not-so-great days for trading on forex as there are high chances of the market winding down with the hours passing by. Be cautious if you wish to trade on these days, bearing your time zone in mind.
Keeping an eye on the European market will be beneficial as it remains most active in terms of volume and you can figure out the best time to invest your money in currency trading. Hence, even though the forex operates 24 hours five days a week, in order to make profits you have to understand the market trends during different days of the week to know the best days to trade forex when the market picks up and trade accordingly.