When it comes to day trading forex, the time at which you trade matters. Plan your day carefully.
Day traders may achieve more when they trade in fast-moving markets with high buyer/seller participation. For example, while the opening of the Asian session may influence currency pairs like AUDUSD, USDJPY, and NZDUSD, the impact may not be that significant as most currencies are quoted against the US dollar. The most volatile period is therefore during the US session opening (14:00 to 15:00 GMT), when most important economic statistics, Fed speeches, and other key drivers are released.
For those trading on the euro and the British pound, the London session opening is the most important period (07:00 to 08:00 GMT). Major economic releases for the Eurozone and The UK are published around this period.
The market also tends to be choppy and rotational just before the closing of the European session and prior to US session opening. If you are opening a position between 11:00 and 12:00 GMT, be prepared for minimal or slow price movement. Many traders observe a fast, manipulative move to capture stop loss right before the US session opening.
Below is an example of how volatility is distributed throughout the day:
To view Exness’ complete schedule of session opening and closing times here.
There is no hard and fast rule in trading as every individual has varying risk appetite. When designing your trading strategy, do bear in mind that the market can be rotational and manipulative during less volatile hours. Likewise, trading during volatile periods has the potential to lead to greater gains and losses.