Best Times to Trade Forex for Optimal Results

Foreign exchange trading or forex is a popular method of exchanging foreign currencies to make a profit. The forex market is the largest financial market, circulating trillions daily by impacting the prices of everything.

However, one has to know the best time for forex trading to make better decisions and avail of certain opportunities. The forex market is open to trade 24/5 and traders can access it from anywhere in the world.

What is forex trading?

In simple terms, Forex trading is the way of exchanging your currency, it is similar to the currency exchange, which you do when traveling overseas. It is the action of “buying” performed by a trader while against the action of “selling” a currency on an exchange rate that frequently shifts depending on demand and supply.

In forex trading, there is no question of physical exchange of currencies and people who do it are fund managers, institutional traders, multinational corporations, and banks. Also, one needs to know how to trade forex including hedging and speculating against market movements.

What are the best times to trade forex?

The foreign exchange market opens 5 days a week, for 24 hours and investors can trade any time within that period. That said, there are times and windows which are considered more favorable to gain profits because of volatility and higher trading volumes which can lead to more opportunities for earning profits.

The best time for forex trading is the time of overlap of trading sessions between major financial centers. The overlap of the European and US sessions is generally the most volatile and active time to trade forex with high liquidity and trading volumes.

Several economic data releases and news events can affect the market movements causing ups and downs in currency prices. Also, it is important to understand that the best time to trade forex depends majorly on your trading style, risk appetite, goals, and strategies. The three major sessions for trading forex are-

  • European Session – 08:00-17:00 GMT 
  • Asian Session – 00:00-09:00 GMT 
  • US Session – 13:00- 22:00 GMT

What are the best forex trading strategies?

Forex trading strategies vary from trader to trader and depend on their trading habits and practices. Here are a few forex trading strategies that are tried and tested over time.

  1. Breakout strategy – When you enter a trade during a price break out of the resistance or level of support. Traders apply technical indicators and price action analysis for identifying potential breakouts. 
  2. Follow trends – Following current trends can indicate market directions to enter the market as the trend's direction. Technical indicators like MACD, moving averages, and Bollinger Bands can help you identify trends. 
  3. Scalping strategy – This strategy allows you to make multiple trades per day and benefit from small price movements. Scalpers make use of order flow analysis and technical analysis to exit and enter trades faster. 
  4. Range trading strategy – The range trading strategy is about finding the currency price and buying at the bottom to sell it at the top of the range. A trader who performs this strategy uses technical indicators such as stochastic or RSI to determine overbought or oversold conditions in the range. 
  5. Swing trading strategy – By using this strategy, traders hold trades for several days and weeks for taking advantage of medium-term price fluctuations. Traders use analysis and tools to identify support and resistance levels for entering trades based on price actions.

Why is it important to follow price movements in forex trading?

Following price, movements are a way of identifying trading opportunities and getting the best forex trading results. By staying up-to-date with price movements, traders can exit and enter points and determine market directions toward profits or losses.

Also, it is a great way to manage risks such as price fluctuations that can indicate volatility and risk. Market movements offer market directions and allow them to stay informed about price fluctuations that can be influenced by several factors such as disasters, economic events, and geopolitical factors. These price movements can also impact the value of currencies and help make better investment choices.

Final Word

The best time to trade forex is always during the active hours when there is a high exchange of trades. Investors can follow the overlaps between major financial centers of the world and take advantage of the high liquidity and more trading activity in a favorable market environment.

However, there is no specific time for trading forex for traders worldwide. They should know their trading style, goals, and strategies and stay disciplined to minimize risks. If you are looking for a leading forex trading platform, NAGA has you covered.

We offer a user-friendly, safe, and ideal trading environment for beginners planning to trade forex. With our excellent customer support and social trading features, you can stand out from your competitors and explore a wide range of trading assets and instruments including several forex trading currencies. Start trading now!

Disclaimer : This information is not considered as investment advice or an investment recommendation, but is instead a marketing communication.

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