How markets workUpdated 3 min readBy the FXNOD team
What are the best times of day to trade?
The best times to trade are when your market is most active, because spreads are narrowest and moves are cleanest. For forex that is the overlap of the London and New York sessions, roughly 12:00 to 16:00 UTC. Stock indices are busiest in the first and last hour of their own exchange. Synthetic indices behave the same at every hour.
The forex day
| Session | Approximate hours (UTC) | Character |
|---|---|---|
| Sydney | 21:00 to 06:00 | Quiet; wider spreads |
| Tokyo | 00:00 to 09:00 | Active in yen and Australian dollar pairs |
| London | 07:00 to 16:00 | The largest share of daily volume |
| New York | 12:00 to 21:00 | Active, with most major US data |
| London and New York overlap | 12:00 to 16:00 | The busiest four hours of the day |
These hours shift by an hour when the United Kingdom, the United States and Australia change their clocks, and they do so on different dates. Convert them to your own time zone and check again in March and in October or November.
Why busy hours are better
- Spreads are at their narrowest, so each trade costs less.
- Orders fill closer to the price you asked for.
- Moves are more likely to follow through than to fade.
Times to be careful
- The minutes around major economic releases.
- The gap between the New York close and the Tokyo open, when spreads are widest.
- Friday evening, when positions are closed before the weekend, and the Sunday open, which can gap.
- Public holidays in the major financial centres.
Other markets
Stock indices and shares are most active in the first hour after their exchange opens and the last hour before it closes. Gold and oil are busiest during the London and New York sessions. Cryptocurrencies trade every day, with activity following the same business hours more loosely.
Synthetic indices: the clock does not matter
Synthetic indices run at all hours with the same statistical behaviour, so there is no best time of day for the market. There is still a best time for you. A bot can run at any hour because it does not get tired, but the settings should be chosen when you are alert, not at three in the morning after a losing session.
The best time is the one you can keep
A consistent two hours a day in the same session teaches you how that session behaves. Trading at random hours, whenever you happen to be free, means meeting a different market each time. Choose a window that suits your life and your market, and stay with it.
Questions people ask
- What is the best time to trade forex?
- The London and New York overlap, roughly 12:00 to 16:00 UTC, when the two largest sessions are open together.
- What is the worst time to trade?
- The quiet hours after New York closes, the minutes around major news, and holiday sessions. Spreads are wide and moves are erratic.
- Is there a best time to trade synthetic indices?
- No. They are generated the same way at every hour of every day, so no time is more favourable than another.
- Can I trade at the weekend?
- Forex and most traditional markets are closed. Cryptocurrencies and synthetic indices trade through the weekend.
Watch it on a live chart
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