When To Trade

Market Hours

It is crucial that you know the best times of the day to trade.

Although the market is open 24 hours a day, it is not active throughout the entire day.

It is easier to make money when the market is active, i.e. when it moves up, or down. It is more difficult to make money when the market doesn’t move at all (or moves sideways).

Here’s a recap of market open hours. The market opens on Sunday at EST 5pm and closes Friday EST 5pm.

The market opens on Sunday at EST 5pm and closes Friday EST 5pm.

There are three main trading centers:

• Asia     – Tokyo Trading Center
• Europe – London Trading Center
• U.S.     – New York Trading Center

The open and close times for each session are shown in the table below.

 

Best Times to Trade The busiest times are when two trading centers are open at the same time. This is because there is more volume at those times. These are the best times to trade.
As you can see from the table above, these times are:

• 3am – 4am EST: London and Tokyo
• 8am – 12 noon EST: London and New York

These are the best times to trade because they give us a higher chance of success. In other words, they   present the highest probability that our trades will move in our desired direction.

The average price movement (pip range) for the top currency pairs is shown in the table below.

The London session is the busiest (highest volume) with two key trading times: when London opens and when New York opens.

 

Best Days to Trade

What are the best days to trade?

The table below shows the average pip range for the 4 major pairs for each day of the week.

Trading  Sessions
Day of week	EUR/USD	GBP/USD	USD/CHF	USD/JPY
Sunday	24	31	36	25
Monday	92	110	141	95
Tuesday	102	128	162	104
Wednesday	101	123	158	106
Thursday	83	98	121	77
Friday	80	96	117	72

 

The market starts slowly on Sunday and has its best trading days on Tuesday and Wednesday.

Fridays are usually busy until 12pm EST when London closes. The market then drops dead until New York closes at 5pm EST. Sundays are usually quiet as not many traders are at work. The exception, of course, is when the market expects a major announcement over the week-end, say, after a G7 meeting, or the Fed bail out of a major bank.

A key point to note is that traders are people. Therefore, their patterns of behavior directly impact the market. Traders are not keen to work on Sundays, hence the market is slow. Same thing on Friday afternoons.

 

But a word of caution. Don’t take the above analysis as gospel. The U.S. dollar had its biggest drop against the euro on September 22, 2008 … a Monday.

 

Making the sacrifice

Trading profitably requires tons of discipline and sacrifice. It is no fun getting out of bed early morning to trade the London session. But that’s what the best traders do to make money. Let’s make the sacrifice.