Choosing the right time is essential for successful trading. The most important thing is that the markets have to be open. And this will vary depending on the time zone where you reside. Generally, we have four main time zones connected to major financial markets. They are Sydney, Tokyo, London and New York. They open at different hours and you will have to check how it translates into your time zone.
The right timing is also important if you favour specific market conditions. Maybe you like to trade in highly volatile markets or maybe you prefer when the market is ranging so you can open short term positions. One way or another, you have to know what time will allow you to take advantage of the situation.
Today, I will be talking about a particular broker, IQ Option, and how to pick the best trading time there.
Be aware that I use the time zone 00GMT that is London time.
4 main trading sessions
Each one of the four main financial markets is open for a duration of 9 hours. But the time they begin is different. Below you will see the table with the times when they operate. The London market is overlapping with the Tokyo and New York markets. When the latter closes, the Sydney market opens. Thanks to this, you have the opportunity to trade 24 hours a day during 5 working days. Just in different markets.
Australian session (Sydney) is on from 21:00 to 6:00 GMT.
Meantime, at 23:00 GMT opens Asian market in Tokyo. It closes at 8:00 GMT.
But the European market (London) is already open. It works from 7:00 to 16:00 GMT.
American session (New York) opens from 12:00 to 21:00 GMT.
The best trading time for you
There is no one best trading time for everyone. But there is the best trading time for you. You have to figure out what kind of trader you are. Maybe you prefer working in the morning, or maybe in the late afternoon. Maybe you are kind of a night person. You need to match your preferences with the markets opening times. Below I suggest what currency pairs are best to trade in which trading sessions.
Morning hours 5:00 – 12:00
NZDUSD, EURJPY, GBPUSD are highly volatile currency pairs.
USDJPY, USDCHF, USDCAD are medium-volatility currency pairs.
Afternoon hours 12:00 – 19:00
Highly volatile currency pairs: EURJPY, USDJPY, USDCHF, USDCAD, GBPUSD, GBPJPY, EURUSD, EURGBP.
Medium-volatility currency pairs: AUDUSD, NZDUSD.
Night hours 19:00 – 5:00
Highly volatile currency pairs: AUDUSD.
Medium-volatility currency pairs: EURJPY, NZDUSD, USDJPY, USDCHF, USDCAD, GBPUSD, GBPJPY, EURUSD, EURGBP.
Different markets volatility
The volatility in the markets changes as the day passes. Below you will find 10 diagrams which represent volatility during the 24 hours of a day for different currency pairs.
Choosing the best trading time is an individual matter. There are a few things to remember though. First, the market has to be open at the time you wish to trade a particular currency pair. Then, you need to decide whether you prefer highly volatile markets or these with average volatility.
Bear in mind that important news releases influence the volatility of the markets. That is why you should always follow the economic calendar.
IQ Option offers a free demo account. You can use it to try various trading time frames and different currency pairs. With time you will get to the ones that suit you best.
Wish you an enjoyable experience!