If you want to be profitable in Forex its vital to know how to trade. But knowing when to trade is also a very important condition to succeed in Forex. The market behaves differently depending on the time of the day and the day of week. It is well known fact to the experienced Forex traders that it is better to trade when the market is busy and it moves in the large and predictable waves. But when the trading is slow and the volatility decreases, the market itself becomes unpredictable and it is easy to lose your money. If you want to trade when the market is the most active then learn these three simple rules:
- There are several major regional Forex trading sessions — Tokyo (0:00–9:00 GMT), London (8:00–17:00 GMT) and U.S (13:00–22:00 GMT).
- The market becomes more active when those sessions overlap: Tokyo and London (8:00–9:00 GMT) and London and U.S. (13:00–17:00 GMT).
- The trading is more active in the middle of the week — particularly Tuesday and Wednesday. Friday is the worst day to trade.
So, to trade with the best market conditions available you just need to trade on Tuesday and Wednesday from 8 to 9 AM GMT and from 1 to 5 PM GMT. Of course, not everybody can trade during these time periods. In this case, I would recommend setting up stop and limit orders to catch the most juicy price movements.