What is the perfect time of day for forex trading

In this article, we will take a look at the impact that day and night in different parts of the world have on various currency pairs on your trading. We’ll focus on the 2 main fundamental forces – supply and demand – to identify the best times to trade forex for you.

One of the several benefits of the forex market is that it is open for trading 24 hours a day. Unlike the stock market.. the currency market works according to the normal business hours of 3 business centers extending across various time zones. 

Traders have the freedom to trade as and when they select, depending on their particular interests.

Fairly, there is no such thing as the best time to trade forex for any one trader..it all depends on individual preferences, goals, and trading strategies. 

Forex Liquidity

Liquidity can be a trouble in some financial markets, but not in forex. Liquidity isn’t relevant when selecting the best time of day to trade forex, it is worth mentioning for background knowledge. Many retail traders trade with a market-making broker, who is always ready to fill an order for them.

In these cases, the only time that troubles occur is when the broker is experiencing trouble filling orders on the Interbank. 

Forex Volatility

Volatility looks at how strong price moves can be at a specific time of the day..and it differs highly in the currency market per pair, and at each time of the day. Traders need to be able to comprehend volatility.. because the wide majority of trading strategies are incompatible with periods of high volatility. Market tests clearly indicate that adjusting a trading schedule according to  strategy-preferred volatility can make the difference between basic losses and profits, even when all other things are equal.

The Why

Why do volatility levels differ per tool, per day, and why does the price move at all? The answer is down to supply and demand. and market Forex is moved by the pure amount of unfilled orders. The more of them there are and the larger in volume they are – the more volatility there will be on the market. 

Institutions place the biggest orders in the biggest quantities and between set times. Unlike private traders who have the freedom to trade as they want, institutions act according to the working hours of the trading capitals of the world. It’s for this reason that the 24-hour forex trading day is divided into 3 international trading sessions :

 -Asian/Pacific.

-London/European.

– North-American.

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