If you are considering the foreign exchange market as a place for you to trade then you might well ask the question: what is the right time to get into forex markets? The answer will vary according to your trading style, but there are certain times of day when trading is more vigorous. Let us look at a few points that you might like to consider.
The forex market works 24 hours a day for five days a week, as trading from one financial centre hands over to another. There are, to all intents and purposes, three major trading sessions. The Tokyo Session is from 00:00 to 09:00 hours Greenwich Mean Time (GMT). The London Session is from 07:00 to 17:00 GMT and the American session is from 13:00 to 22:00 GMT.
You will appreciate that the best time to trade is probably when the markets overlap. Why? Because at these times there are more participants and that means that there is more volume and also momentum to fuel trends and breakouts. These overlaps also tend to be when economic data is released, because such data triggers currency movements.
The overlap between the London and the American trading sessions is when the forex market is most active. You will realise that this time of maximum activity answers the question what is the right time to get into the forex market if you plan on using momentum, trends and breakout trading strategies. The best time for momentum and trend trading is usually right after economic data has been released. Breakout trading is also best got into after data has been released and also as the trading session opens. Range trading usually works best during the gaps between the trading overlaps or in the lull before a particular market session closes.
Risk warning: Spreadbetting, CFD trading and Forex are leveraged. This means they can result in losses exceeding your original deposit. Ensure you understand the risks, seek independent financial advice if necessary. The value of shares and the income from them may go down as well as up. Nothing on this website constitutes a solicitation or recommendation to enter into any security or investment.