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What Time Is The Best Time to Trade FX?

This week has been a special week for me as it marks my first week of a new life emigrating from the UK to my new home in the USA. To kick things off, I have had the pleasure of taking a trip out to Irvine, California to the Online Trading Academy HQ to teach the on-location Professional Forex Trader class. As you may already know, one of the most attractive aspects of trading the global currency markets is the level of flexibility it offers us, with time of day and that it is a market that is pretty much open 24 hours a day for almost 6 days a week. With it opening around 5pm EST on a Sunday early evening and then trading continuously though the week until the following Friday late afternoon; you can see that almost anytime is a good time to trade and why so many people are attracted to it and want a piece of the action, as it never really stops!

Now while it may be open for the majority of the week, the market also has its peaks and troughs of liquidity and movement. The currency market is widely regarded as being made up of 3 main trading centers across the globe, those being Asia, Europe and the USA, with the Far East kicking the proceedings off and the States wrapping things up at the end. In general, the time zones occur in the following segments:

  • Asia: 9pm – 2am
  • EST Europe: 3am – 11am
  • EST USA: 8am – 4pm EST

The Asian session is generally regarded as the quietest session of the 3, with Europe being the most volatile and USA quieter but a little higher than Asia. If you are a day trader, this means that you would probably focus most of your attention on the European sessions for the most movement and volatility. When I lived in London, I enjoyed access to all 3 sessions and had the luxury of being actively awake for the European session everyday. Now that I live in the USA I am on a very different time zone, but for me, my time to trade has not changed all that much because as a FX trader, when you know what to look for it really does not matter what part of the world you live in at all. Let me explain further.

Free Trading WorkshopOne of the best things any aspiring trader can learn to do is to understand how to develop a rules-based strategy, put it to action and then simply walk away and allow it to do its thing. Getting in the way of the plan is when we run into trouble. This is why we encourage our students at OTA to approach the market using our patented core strategy in a “set and forget” manner. With this in mind, I get plenty of questions from students asking how my FX trading is impacted when I travel to teach and, more importantly, now that I have moved to a completely different continent. The answer is simple: it does not change at all! When I was living in the UK I would do my analysis during the “dead zone” hours, these being the 2 hours between the US close and the open of the next Asian session, roughly 4pm to 6pm Eastern time, which was 9pm to 11pm UK time. Living in the States my time zone may be different but I am actually doing the analysis and setting up the trades at exactly the same point of the day.

What a fantastic aspect of the FX markets, especially when you begin to realize over time that when you set and forget your trades, you don’t even need to be there to see it happen, irrespective of whether the trade wins or loses. In fact, I have always said that it is better to not be there to watch the position, as this will ensure that you stick to the plan and allow the opportunity to develop as it should. Below is an example of a setup we looked at this week in the class on GBPNZD:

The Forex market offers trading opportunities at any time of day or night.

The highlighted Demand zone showed us a major imbalance between the willing buyers and sellers, indicating that the buyers did not get all of their orders filled, meaning we were looking to buy a pullback to the area if it returned to the zone. Not knowing how long this would take, we had to set the entry, stop and target and then leave the rest to do its thing. The trade triggered overnight with a nice reaction:

Set-and-forget trading helps ensure your emotions won't interfere with your trading plan.

At the time of taking the above screenshot, the pair has already risen around 250 pips, and that all happened during the Euro session while we were asleep in California. We then had the option to trail the stop and lock in some profit, allowing the GBPNZD the chance to hit its final target a few hundred pips higher. So, did we need to be there to see this happen or did the plan take care of this automatically? I think the result clearly speaks for itself. Be mindful that if you decide to embark on the FX markets journey, the more you allow things to fit into your life rather than the other way around, the better it is likely to be for you in the long run. FX offers flexibility and opportunity to choose your time to trade, around the clock, no mater how hands-on or hands-off you want to be. It doesn’t get much better than that.

Take care and be well,

Sam Evans – sevans@tradingacademy.com

DISCLAIMER This newsletter is written for educational purposes only. By no means do any of its contents recommend, advocate or urge the buying, selling or holding of any financial instrument whatsoever. Trading and Investing involves high levels of risk. The author expresses personal opinions and will not assume any responsibility whatsoever for the actions of the reader. The author may or may not have positions in Financial Instruments discussed in this newsletter. Future results can be dramatically different from the opinions expressed herein. Past performance does not guarantee future results. Reprints allowed for private reading only, for all else, please obtain permission.