What is the best time to trade in Forex?

Feb 01, 2021

When the Forex (foreign exchange) market is most active, it is the best time to trade. Trading spreads are the prices that have (the difference between the bid and ask prices) tend to reduce during this time. In some cases, less money goes to the market makers who facilitate currency exchanges, leaving more money in the dealers’ pockets.

The Four Major Foreign Exchange Markets:

London, New York, Sydney, and Tokyo are home to the four major FX exchanges. Forex traders must memorize their hours, paying particular attention to overlapping conversations taking Tip: When many discussions are active simultaneously, trading volume increases, and volatility—the amount and rate at which share or currency prices change—increases. Volatility might be more profitable to forex traders.

This looks like a contradiction. Investors, after all this, are wary of dynamic market movements. However, higher volatility within the currency market means more potential for profit.

Hours of Trading on the Forex Markets around the World

The FX market is electronic and operates between 5 p.m. Eastern Standard Time on Sunday and 5 p.m. Eastern Standard Time on Friday (EST). From Monday up to Friday, each exchange has its trading hours. The four most crucial time slots (all in EST) for the average trader are as follows:

While each exchange is self-contained, they all deal in the same currencies. As a result, when two businesses are open, the number of traders actively buying and selling a currency increases dramatically. Bids and asks on any one currency market exchange affect bids and immediately ask on all other active discussions. This reduces market spreads while increasing volatility, as shown in the windows below:





10:45 AM TO 04:15 PM

05:45 AM TO 11:45 AM


09:00 AM TO 03:00 PM

05:30 AM TO 11:30 AM


08:00 AM TO 04:30 PM

12:30 PM TO 09:00 PM


09:30 AM TO 04:00 PM

07:00 PM TO 01:30 AM


The time slots for different platforms to trade into Forex as per Indian timings are mentioned above, Refer to know in-depth about timings and trading slots of Forex markets. For overseas investors, the New York exchange is essential. Its transactions involve the US dollar, accounting for 90% of all currency trading. The dollar’s movements cause a huge impact all across the world.

The 8 a.m. to noon overlap of the New York and London markets is usually the best trading time. More than half of all forex trades are conducted through these two trading centers. On the other hands, trading takes place mainly between 5 and 6 p.m. on the Singapore and Sydney exchanges, with significantly less volume than during the London/New York window.

There are exceptions, and the projected trade volume is predicated on the premise that there would be no noteworthy news. Political or military events could significantly increase volatility and trading activity during ordinarily sluggish trading hours.

Specific economic data that can potentially impact the market are released regularly. It includes information on unemployment, the Consumer Price Index (CPI), trade imbalances, consumer confidence, and consumer spending. Knowing when this news will be released will help you time your trades.

Forex Trading Hours With High Volume Can Be Dangerous:

Forex traders should exercise caution because currency trading frequently involves high leverage ratios of 1,000 to 1. While this ratio provides enticing profit chances, it also exposes an investor to the risk of losing all of their money in a single trade.

According to a Citibank survey, only 30% of retail forex traders break even or make a profit. Surprisingly, 84 percent of individuals surveyed believe they may profit from the FX market. The main point is that new forex investors should open accounts with companies that provide demo platforms, which allow users to simulate forex trades and calculate hypothetical profits and losses. Investors can securely begin making actual forex trading once they have learned the ropes and gained enough experience.

While there is money to be gained, as with many other investments, there is also a lot of money to be lost.

Meaning of Forex Trading and its work structure:

In simple words, forex trading is the trade of multiple currencies to profit from changes in their relative prices. Rather than trading on exchanges, most of this trading is done through electronic platforms or over the phone. Pair of currencies is used in each trade.

How many hours of trading per day are required to make money in Forex?

Your capacity to profit from forex trading is determined by the percentage of transactions you win and the size of your trade profits. A typical trader who trades for two hours during peak hours can make around 100 deals in a month.

How can one get started with forex trading?

You only need to make an initial deposit with a brokerage to trade FX. Many brokerages don’t have a minimum deposit requirement for forex trading. However, it’s usually between $50 and $500. Before you start putting your money in forex trading, taking risks it’s also good to read in detail and length about the subject and practice making trades. Before investing your actual money, you can practice demo trading on various electronic trading platforms.

The Balance does not provide tax, investment, financial services, or advice. The material is being provided without considering any specific investor’s investment objectives, risk tolerance, or financial circumstances and may not be suitable for all investors. Past performance does not guarantee future outcomes. Investing is entitled to risk, including the possibility of losing money.