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What is best time to Trading?
A very commonly asked question what is the best time to trade? Considering that the forex market is open on a 24/7 basis it may be a bit trickier to choose the best time to trade. Is it better to operate during the day or at night? Does the country where you are in affect? This is what we shall attempt ot clarify in this article. So, first things first you need to bear in mind that there are different time zones. The Overnight zone goes from twelve at night till three-thirty in the morning in Europe. Hence it is the period where the US the exchanges have not yet opened.
This zone is characterized by a relatively lower volume as it is a time when the only zone which is open is the exchange in Asia. During the last part of the overnight zone, Europe will enter and so the volume increases a bit but not significantly as the US will still have to open.
After three-thirty, until ten is what is most common for traders due to the fact that this is the American time. It is when North American markets start to operate. For scalpers this is the best time as there is more volatility as well as more volume.
Between ten at night and twelve the volume decreases a bit as it is back to the timing of the overnight zone. So as you may see the main differences between the zones are the volume changes that typically occur between them.
It is also worth mentioning that there is a small time slot where traders need to be more careful. This is between three-thirty till four, as during this period the American market opens and as a result the indices will still need to position themselves and consequently this leads to a lot of volatility, making trading more difficult. It is better to allow the market directions to stabilize a bit so as to be less at risk.
It is also important to note that there are two time changes during the year. During some times the US will open at two-thirty, which is an hour earlier.
In case you work overnight and there is little volume, it probably reflects in less volatility and for some traders this is considered to be good. On the other hand if one prefers scalping, he would aim for periods where there is more volatility. Hence you would want to trade during regular trading hours, that is, between three-thirty and ten at night.
This zone is characterized by a relatively lower volume as it is a time when the only zone which is open is the exchange in Asia. During the last part of the overnight zone, Europe will enter and so the volume increases a bit but not significantly as the US will still have to open.
After three-thirty, until ten is what is most common for traders due to the fact that this is the American time. It is when North American markets start to operate. For scalpers this is the best time as there is more volatility as well as more volume.
Between ten at night and twelve the volume decreases a bit as it is back to the timing of the overnight zone. So as you may see the main differences between the zones are the volume changes that typically occur between them.
It is also worth mentioning that there is a small time slot where traders need to be more careful. This is between three-thirty till four, as during this period the American market opens and as a result the indices will still need to position themselves and consequently this leads to a lot of volatility, making trading more difficult. It is better to allow the market directions to stabilize a bit so as to be less at risk.
It is also important to note that there are two time changes during the year. During some times the US will open at two-thirty, which is an hour earlier.
In case you work overnight and there is little volume, it probably reflects in less volatility and for some traders this is considered to be good. On the other hand if one prefers scalping, he would aim for periods where there is more volatility. Hence you would want to trade during regular trading hours, that is, between three-thirty and ten at night.