The best time to day trade the forex market is dependent on the forex pair you are trading; certain pairs are more heavily traded at different times of the day based on which countries are open for business.
I will also show you how to find the best time to day trade other forex pairs not covered here. Forex pairs are most active when one or both of the markets associated with the pair are open for business. Exact times of heightened volatility will be addressed shortly.
Here are the market hours for major markets around the world Note: During the week there is always a market open somewhere, allowing you to trade hours a day. Forex is not a centralized exchange. Rather it is a network of traders and banks around the world. Since there is always a major player trading during the week, this is what allows for trading hours a day. To see the trading hours in your specific area, set your timezone in the upper left hand corner of the tool above.
Many forex traders work off GMT time, so you may also select that as an option. In addition, select an asset from the drop-down box, then hit Spread, Volume or Volatility to see how those stats fluctuate throughout the day.
As an additional tool, there are indicators that mark the open and close of the various markets on your charts for you. The best time of day to day trade forex will vary depending on what type of strategy you use. While major markets are open the popular trading pairs, like those listed above, tend to have trends lasting an hour or more and moderate to high volatility.
This favors trend traders or traders seeking volatility. Traders who utilize a range trading strategy or prefer less volatility will likely find the quieter times of day more suited to their day trading style. Below I discuss the most active and volatile trading times in select forex pairs, and therefore the best time of day to day trade forex if you are an active trader seeking volatility and trending opportunities.
Since I am trend trader, I tend to focus on higher volatility times, which typically occur during the mid-to-late European session and early US session—or between approximately midnight and 10 AM Eastern Time.
The charts below show the hourly volatility of each pair, showcasing which times of the day are best for day trading forex. All charts below are based on a 10 week average. While volatility changes over time, the times of day when the market is most active is not likely to significantly change over time. Times listed are GMT, adjust accordingly for your preferred time zone. Tables are based on volatility as of Nov.
As indicated, volatility may change but the hours that are most active typically do not. These are all European currencies traded relative to USD, and therefore are most active at similar times. While this is an active time overall, the most active time is between and GMT, so if you only have a few hours to trade, trade during that window. While this is an active time overall, the most active time is between and GMT. The hours from to GMT are also quite active. The most action is typically seen between and GMT.
Since Japanese and US market are open at different times, the most active times of the day are spread out. Locate the most active or quiet time, depending on your strategy, to find the best time to day trade that pair.
If you are prefer ranging a strategy or quieter market, look for times of decreased volatility. For additional reading on volatility as it relates to day trading, please see: Good point on the days of the week. Tuesday and Friday are about 70 pips and Monday just over 60 pips. So a pretty big difference. Some other pairs have even much more pronounced differences in weekday volatility.
An Open Market Means Increased Action Forex pairs are most active when one or both of the markets associated with the pair are open for business.More...