One of the greatest advantages of the forex market is that it is open and functioning 24 hours a day excluding weekends. This means that you can trade whenever it’s comfortable for you or whenever you get an important forex hunch or hint. That’s all well and good, but you must keep in mind that not all hours of the forex market provide the same profit opportunity. Profit is made when the forex market moves up or down, but making profit when the forex market isn’t moving would prove to be a bit of a challenge. The amount of motion in the forex market is called volatility. In this article we’ll explain why the market doesn’t always have the same volatility level and how you can pick the best hours to trade in.
The 24 hours of the forex market are divided between four trading sessions situated in four major global trading sessions – London, New York, Tokyo and Sydney. The London session is open 08:00-17:00 GMT, the New York session is open 13:00-22:00 GMT, the Sydney session is open 22:00-07:00 GMT, and the Tokyo session is open 00:00-09:00 GMT.
Not all sessions have the same trading volume. In the chart above the sessions are ranked from top to bottom according to daily trading volume. As you can see the London session is by far the busiest trading session with an average daily pip range of 80 pips on the EUR/USD. The New York session is the second busiest with an average daily pip range of 67 pips on the EUR/USD, followed by the Tokyo session with an average daily pip range of 66 pips on the EUR/USD. The Sydney session is by far the least busy one and is usually discounted by traders in their quest for forex market volatility.
As you’ve probably figured out, the best times to trade in the forex market are when there are two major overlapping trading sessions. These times occur when the Tokyo session overlaps with the London session between 08:00 and 09:00 GMT, and when the London session overlaps with the New York session between 13:00 and 22:00 GMT. These are the times when traders are presented with the greatest profit opportunities. Trading during the Tokyo session alone or during the Sydney session alone would probably get you to pay the spreads for your positions and little else.
Now that we know that not all hours of the day are equally profitable for forex trading, we must also point out that not all days of the week are equally good for forex trading either. Sunday is the worst day for trading forex by a milestone with an average total pip range of just 24 pips on the EUR/USD. This is understandable since only the New York session is open on Sunday evening and the market doesn’t start trading at top speed, in other words, it takes the forex market some time to warm up after the weekend. Friday is also no picnic for forex trading with an average total pip range of 80 pips on the EUR/USD. This is explained by the coming weekend causing traders to slow down trading activity in advance. The best days of the week to trade forex are Tuesday and Wednesday both with a total pip range of over 100 pips on the EUR/USD.
In conclusion, just as it’s important to choose which currencies to trade in the forex market, it is equally important to choose the right times to trade in since with no market volatility even the most expert of traders will have a hard time making a profit.

Back to Educationl Articles