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American Trading Session: Best Forex Trading Hours

As a first-timer, the prospect of Forex trading might seem pretty exciting to you. And, as you were in such an adrenaline rush, you probably are thinking about investing your money right away too. However, that’s where you should put a stop to your thoughts.

Like any other trading segment, the stock market tends to be pretty sensitive too. Sometimes, the price might rise, while in other cases, it might drop, like the temperature in Antarctica.

So, if you want your trading endeavors to succeed, more than making a strategy regarding the same is required. Besides, you must have some information about the perfect stock market trading hours as well. Let’s keep reading to know more about them.

The Best Hours For Trading

In all honesty, the best time to invest your money in stock market trading is during overlaps. Before we delve deeper into that, let’s talk about what an “overlap” is first.

So, the forex trading market (worldwide) tends to open at different times of the day. For example, the New York-based one usually opens at 8:00 AM, while the Japanese tend to start working at 7:00 PM. And the former closes at 5:00 PM while the latter stops at 4:00 AM.

Now, while both markets are open, their time period will “overlap” with each other. And that is the perfect time for you to invest in the market. Let’s find out more about them.

1: London-US (8:00 AM to Noon)

The heaviest overlap within the Forex falls under the London-USA trading market. According to Investopedia, around 70% of trades occur during the overlap between these two segments. After all, the Euro and the US Dollar are the most sought-after currency, and this is the best time to get them. Also, the price activity, or volatility, of the market tends to be quite high during this period. So, it’s better to make a strategy before going in.

2: London-Tokyo (3:00 AM to 4:00 AM)

Unlike the former, the duration of this trading period is quite low. However, due to that reason, the volatility of the market tends to be quite high. Also, the time period is quite abrupt for most people. After all, you really can’t expect most people to stay awake at that time of the night, right? Hence, you’re not going to find any US-based traders during this period. But, lots of Asian and even UK-based people will be available in the market.

3: Sydney-Tokyo (2:00 AM to 4:00 AM)

Compared to the previous option, this timeline tends to be quite crowded for some reason. It’s not as volatile as the London-USA trading period as well. Thus, you can’t really expect to get a massive amount of money from here. But you can certainly find more and more traders till the clock hits 3:00 AM. In this case, the JPY/Euro should be the ideal currency pair to go for. However, again, we’re not sure if you can earn lots of money from here or not.

The Bottom Line

Trading of any assortment is a risky affair. So, it’s always best to create a proper strategy and then make a move in the market. But how do you plan your steps? Well, to begin with, we’ll ask you to take a close look at the market and check how well it’s been performing for the last six months. Does it look too volatile? Or is it stable enough?

Once you have found the right option or market, the next thing you should do is choose the amount you’re going to invest in. It’s best to diversify and put your cash in as many markets as you can. It’ll help you make the most out of your investment while protecting yourself from market volatility. Take a professional’s help if you’re not sure what you should do.

But don’t go in without a plan.