Prime Trading Hours

Hi, I am new here. I must have registered few weeks ago, but here is my first post - some basic forex tips I hope you find valuable.

Financial markets in the US open around 8AM EST and the stock market closes at 4PM EST. Between 8AM and 4PM, Forex market is very liquid, especially between 8AM and 2PM. In Europe, financial markets are open from 2AM EST to 11AM EST which is the perfect time to trade currencies. Also, at 7PM EST Asian markets open, which is a great time to start trading USD/JPY.

Hope you share some tips too, thank you!

I agree - after 1300EST the volatility usually drops off resulting in shallow moves which become increasingly difficult to turn into profit, even with a 3 pip spread. However, it's definitely worth trading from 14-1500EST on the days when the FOMC minutes or the Fed interest rate announcement is released.

Steve

GammaJammer said:

Dantol - I would dispute your assertion that the liquid time for the fx markets stretches as far as 4PM EST. In my experience liquidity dries up extremely rapidly once London go home. But for retail traders (which means the vast majority of people posting on T2W) this impact will be to all intents and purposes invisible.

Personally, wherever possible I perfer to try and limit my trading to London hours. This applies whether trading retail or wholesale amounts.

My $0.02

GJ

Click to expand...

Are you saying.....

Retail FX traders do NOT have to worry about liquidity. This is for 2 reasons:

1/ They are not trading in a real market. They are trading on a quote provided by a party that can make any quote it pleases.

2/ Even if they were trading in a real market, the liquidity in the spot OTC market would be deeper than any retail trader would have to worry about.

Liquidity is defined by how easily a market will absorb orders without impacting the price. I do not think the average retail/Trade 2 Win member has to worry about their $20,000 account causing any ripples in the markets - not even orange juice futures!

Maybe people are mistaking liquidity for volatility.

If you want one 'best time' to trade fx. For me it's around 1.30 gmt. But it all depends on what 'news' is expected. I'm in front of the the screen at any time from 5.30 to 8.00. And a lot of times I think that I should have stayed in bed. As always the times that you do stay in bed; are the times that you miss a lovely move. I am only talking about the eur/usd in this instance.

forex hourly volume cycle, 1992

attached is an old but probably still valid estimate of hour by hour volume in forex

Chart attached of converging market hours.