Everyone knows that Forex market is open 24 hours a day. However it does not mean you need to seat in front of your computer staring at your charts. It is not true that most successful traders spend most of their time watching the market. Traders need to trading according to the schedule of market activity.
Traders with signs of exhaustion like red eyes are not the ones who make money consistently trading currencies. Successful traders are very well aware when they need to be watching the price charts and when they can shut down the computer and get away form trading.
It is impossible to make any progress by trading in a state of exhaustion. Being fresh and alert is the required state to make right decisions that will make you profit. Therefore a question arises, how should you schedule your time?
According to my experience there are times during the day when you can trade profitably. Hopefully my advise will help you to schedule your time and get rid of tiredness. I must note that any time which is mentioned here is for US eastern time zone. So make your adjustments to your time zone.
Asian Trading Session
Asia wakes up during evening time in US. Banks and other financial institutions of Japan, China and Australia are most active from 5 pm until 11 pm (EST)
The trading volume is very low at this time of the day. This is because biggest players of Forex – European and American banks and other investment institutions are closed. Sometimes there can be economic news in Japan. Those can sometime increase the price movement. However it happens not very often.
You can do scalping trades during this period. However in my opinion it’s not worth it. So if you have any open position make sure you placed stop loss order and go do something else besides trading in Forex.
The next two hours 11 pm -1 am (EST) are market’s slower time period. Traders in Asia are ready to go home. Probably the best choice to trade during this time would be any currency pair that has Japanese Yen in it, for example GBP/JPY or EUR/JPY.
Trading During European Session
Time period from 1 am to 4:30 am one of the most important trading times in Forex. European financial institutions and traders are fully active. Usually this time period can set the trend for the rest of the day.
In my opinion European session can be one of the most profitable time periods for traders. However you need to watch market very closely since it can present a good opportunity for a trade as well as a strong move against your position. Also do not forget about economic news releases at this time. Usually the come between 4 am and 5 am.
The London session is most active during the times between 4:30 am and 6 am (EST). Especially pay attention to the news releases between 5 am an 6 am. The best currency pairs to trade are EUR/USD and GBP/USD.
NY Trading Session
Morning time in New York starting 8 am is the most active time in Forex market. The big players become active at this time. Largest financial institutions, investment funds, and traders can change any direction of the price movement.
For a day trader this time period is probably the most active one. Many Forex traders trade only during New York session. Since it is the most volatile period it can present many good trading opportunities. Most of the economic news that move the price are released at 8:30. This activity slows down around 1 pm -2 pm (EST).
The rest of the day after that is usually calm. However from time to time Federal Reserve releases it’s news. They do it at 2:15 pm. It can move the currency pairs some more.
As you can see there is not too much time during the day when market presents the opportunity to trade profitably. Therefore when if you are a day trader and there is a time period when there is no activity, simply close your trading charts and go take a rest from your trading. Don’t try to catch all the moves possible during the day. Otherwise it is a sure way to fail in Forex.
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