Answering the question of when the best Forex trading hours are can be difficult since the answer is going to vary based on a trader’s favorite currency pairs. All action in the Forex markets is done with currency pairs, and since the time zones can vary greatly this means the best times to trade the U.S. Dollar (USD) could be far different from the ideal moment for dabbling with the Japanese Yen (JPY).
A general rule of thumb among many currency traders is that the more activity in a given market, the better a time it is to trade. This means that each nation’s currency experiences a nine hour window each day when their nation’s markets are open and busiest. That’s when the most trades are happening with a currency pair involving that currency because there’s more action to profit from. Going on Eastern Standard Time, this means the best frame to act on a U.S. Dollar based currency pair is from 8:00 a.m. to 5:00 p.m.
However, you also need to know when the markets for other nations are open compared to your time zone in order to work during optimal Forex trading times. So a trader living on the East Coast of the United States who wants to trade in the Yen needs to know that Japan’s markets are open from 7:00 p.m. to 4:00 a.m. in Eastern Standard Time. Sydney, home to Australia’s trading markets, opens at 5:00 p.m. EST to 2:00 a.m. EST and obviously Great Britain, New Zealand, and Switzerland will all have their own market hours as well.
Knowing the optimal hours for Forex currencies compared to your time zone is only the first step. For some pairs, there might be two markets that overlap. For example, New York City and London overlap four hours of each trading day, meaning that is an especially good time to look at the currency pair of the U.S.
Dollar and the Great Britain Pound. These market overlaps can be the busiest trading times for both currencies, making it even more important for traders to jump into the frenzy.
At the end of the day, there’s little question that finding the best market times correlates directly with what pairs are being traded and when that nation’s normal trading hours are. This doesn’t mean that profit can’t be made during other times of the day, but by trading during the best Forex trading hours the chances of profiting increase.