Home Courses Course-01 17 – Is It Ideal To Trade 24/5 In The Forex Market?

17 – Is It Ideal To Trade 24/5 In The Forex Market?

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We know that the Forex market is open 24 hours on all days except for the weekend. Does this mean that you can take a trade anytime on any day? Well, you can, but this is not what the professionals prefer.

If you want to bring in professionalism in your trading, then there are specific days and times to enter the market. Let us discuss that here.


Best Times of the Day to Trade

The primary factor we consider to trade forex is the liquidity and the volatility; because, if there’s no liquidity, it is not possible to make a profit from a trade. So, we must determine the times of the day when the market is liquid and volatile.

In the previous lessons, we have discussed the different sessions of the market. We talked about the overlap of sessions as well. Let’s bring that concept back here to understand the best times to trade forex.

During the overlap of sessions, there are two sessions that trade the market. Naturally, the number the traders increase, and so does the volume of orders. Hence, this significantly builds up liquidity and volatility.


Which Overlapping Session to Focus on?

Tokyo-London Overlap

Though there is an overlap in the sessions, the liquidity is pretty thin. This is because; normally, there is not much movement in the Asian session when the London session begins. So, this overlap session is only dominated by the London session.

London-New York Overlap

This is the busiest time of the day, as the two largest financial institutions are open for trading. During this session, one can expect some big moves from the markets. Moreover, this is when the major news in the U.S and Canada is released as well.


Best Days of the Week to Trade the Market

Apart from understanding when exactly to trade, we must also know the preferred days to trade in the market.

Below is the chart of the average pip movement of different pairs for each day of the week.

Pair Monday Tuesday Wednesday Thursday Friday
EUR/USD 109 142 136 145 144
USD/JPY 65 82 91 124 98
AUD/USD 84 114 99 115 111
GBP/USD 149 172 152 169 179
NZD/USD 81 98 87 100 96
USD/CHF 84 119 107 104 116
USD/CAD 93 112 106 120 125
EUR/GBP 74 81 79 75 91
EUR/JPY 133 178 159 223 192
GBP/JPY 169 213 179 270 232
EUR/CHF 55 55 64 87 76

 

From the above chart, we can see that most trading happens from Tuesday-Friday. On Fridays, the market is busy only until 12:00 PM EST, and later it just loses pace. Hence, from this, we can conclude that the ideal day to trade is during the middle of the week as we can expect good liquidity in the market.

Do professional traders trade anytime during the 24 market hours?

Correct! Wrong!

We determine the best time and day to trade by examining the liquidity and volatility of the market.

Correct! Wrong!

Which is the most preferred overlap session?

Correct! Wrong!

From the table, given above, which is the most moving currency pair in the entire week?

Correct! Wrong!

From the days given below, which is the best day to trade the market?

Correct! Wrong!

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