No exaggeration meant; the Forex trading market actually never sleeps. It is a 24 hour market, and the currencies can be traded at any and every time. However, it would not be wrong to say that there are certain times during the day, which are better to trade the Forex. Timing indeed is crucial in the Forex market, as selecting the best time for currency trading is a good way to maximize potential profits from each trade. It is one secret that expert traders are well aware of!
Identify the Power Hours
Trust me; these power hours are no different from a power house that could light the entire place. Well here, it can add brightness to your financial world. The ‘power hours’ are the forex trading times when the volume of currency traded and its volatility is at peak. This would mean that high volume of currency pairs are available to be traded, and that their prices are trending quickly and moving rapidly. This may create large pip movements in almost all the major currency pairs during these hours.
The Forex trading times that are power hours are between 2:30 am and 11:00 am EST. So you see there are nine hours to make the most out of the Forex. This is the overlap time of US and European markets, which are the most active and crucial trading centers. Among other Forex trading times, this is one time where most of the expert traders focus their attention and effort on. There are several other Forex trading times that could yield profits, however, the results of power hours are indeed dramatic.
Avoid trading during ‘Cold Zone’; this is the end of the US session and throughout the Asian session. Trading volume is quite low and the trends are quite unpredictable during these Forex trading times. They are from around 4 pm to about 2 am EST. It’s a time to warm-up for the upcoming power hours or just relax.
Currencies to Trade in
If you have the opportunity to trade in the power hours, trade in the ‘hot currencies’ that could produce quick and substantial earnings. This may mean trading in the following currencies that show the largest pip movements in the power hours:
- EUR and USD
- USD and CHF
- USD and CAD
- GBP and CHF
- GBP and JPY
Along with considering your experience in trading, investment objectives and the appetite for risk, do consider the hours that may impact your profits. Timing is a crucial tool that the traders seek to capitalize on to make great profits. It is a good way to identify strong price movements, and open the doors to make fast cash. Great results ask for some efforts; this may mean rising up early or sleeping late for some traders to reap great benefits out of the peak hours.