This is especially true because of the overlapping European and North-American trading sessions, let alone the fact that even Japanese Yen JPY is highly affected by the behavior of the American Dollar USD , thus, affecting the Asian Session too. Therefore, when choosing a currency pair to trade, one should pay attention to both volatility and liquidity issue, since both of the factors influence trading opportunities.

In any case, the currency pairs or crosses that have one of the most important major currencies, namely, EUR, USD, GBP, JPY, as a base or a quote currency would are closely watched and extensively traded, creating high-frequency trading opportunities in the Forex market. The choice of currency pairs based on trading sessions is especially vital for day traders who capitulate on respective currencies with the hope to see moves in one direction or another.

So, if the European trading session is over, for example, you might want to postpone trading GBP crosses until next day. Similarly, if the Asian trading session is over, trading NZD would be perhaps not a good choice until Sydney trading session is more active again.

In sum, the choice of currency pairs for trading purposes is partly a function of trading sessions, and traders should focus more on those currencies that promise higher volatility and liquidity, and avoid those that are comparatively dormant due to passive market conditions. See also :. Forex Trading Hours. What Is the Best Day Time to Trade Forex? What Is the Best Timeframe to Trade Forex? When we speak about volatility or volume as your main indicator for market activity, it is important to note that volatility is also cyclical.

Sometimes markets are ranging for days and you cannot make any profits in markets that are just flat. It may happen for a certain Forex pair or it may be for the whole Forex market globally! Therefore, if you are a trend trader, you are seeking for trends. For trends, you need trading volume to sustain it. Take a look at this example, during the summer of the volatility index went down so much that every trend trader ended up with short trend profits at best.

Today we are close to that low volatility level:. A good trend trader will trade when conditions are right. They avoid ranging markets with the help of indicators that show volume or volatility such as Volume Indicator , Spread Warner , Average True Range ATR and others. Now, one might actually think that ranging market is great! Well, there are different kind of traders, strategies, indicators or robots that are set to work optimally in such market conditions when the volume is low.

Meet the scalpers. Best time to trade for scalper traders is on short timeframes like M1 or M5 in order to capture currency pair movements that form within mere seconds to few minutes maximum. They have many trades in a day. High volatility is not good for them, here is why: as currency pairs move up and down much more during their respective trading sessions, their trading setup cannot get a valid signal.

There is too much noise for their strategies on M1 and M5 timeframes and their set stop loss level gets triggered too often. Scalpers trade between trading sessions and the best time for them generally is when all Forex currency pairs show low volatility, such as during the summer of It is best to avoid trading currencies, equities or anything if you do not have the right mindset.

Once emotions start messing with your decisions, it will show on your account balance. Every trader will feel the toll of Forex, your mood will swing in the same way as your profits and losses. Determination and confidence will be put to test as never before. Here is what you can do. Train yourself to stick to the plan, once the decision is made do not change it. Let that stop loss you have set according to your strategy be triggered if it has to.

Train your discipline, if you have found the best currency pairs to trade with your plan, then always be ready to apply that plan. This strategy that you made is your Forex bible that will help you clear emotional swings. Now, every good trader must have a plan. Once you have determined what type of trader you want to be, the next big thing to do is to make a trading strategy.

Which indicators to use?

Every trader dealing with Forex already knows that Forex market is open 24 hours a day, 5 days a week. This creates an opportunity for traders around the world to trade currencies without any limitations.

Even if the Forex market does not close except for weekends, however, people do not trade every single hour of the day, due to understandable reasons like other daily activities, chores, or simply the need to rest at night. Because of these factors, traders, whether in Asia, Europe or North America, mostly prefer to trade during one or two trading sessions, unless a bot is trading for them. Choosing to trade during a specific session, in turn, has its own rules, characteristics and consequences.

One of the most important related factors is the way currency pairs behave during specific trading sessions. Accordingly, it is important to realize that certain currencies peculiar to one trading session may not be of interest during another trading session. Take AUDJPY pair, for example. Conversely, the pair would be comparatively dormant during European and North-American sessions due to limited interest of international traders in the pair in the respective geographical regions.

On the other hand, if you look at EURGBP, for example, you should expect volatility and liquidity to be highest during European trading session, while comparatively less interest in the pair during North-American or Asian trading sessions. Due to the highly important base and quote currencies involved in the pair, namely, EUR and USD, the pair is the most watched and traded currency pair in the world, with very high liquidity, and, thus, low spreads due to competitive prices in the international Forex market.

This is especially true because of the overlapping European and North-American trading sessions, let alone the fact that even Japanese Yen JPY is highly affected by the behavior of the American Dollar USD , thus, affecting the Asian Session too. Therefore, when choosing a currency pair to trade, one should pay attention to both volatility and liquidity issue, since both of the factors influence trading opportunities.

In any case, the currency pairs or crosses that have one of the most important major currencies, namely, EUR, USD, GBP, JPY, as a base or a quote currency would are closely watched and extensively traded, creating high-frequency trading opportunities in the Forex market.

The choice of currency pairs based on trading sessions is especially vital for day traders who capitulate on respective currencies with the hope to see moves in one direction or another. So, if the European trading session is over, for example, you might want to postpone trading GBP crosses until next day. Similarly, if the Asian trading session is over, trading NZD would be perhaps not a good choice until Sydney trading session is more active again. In sum, the choice of currency pairs for trading purposes is partly a function of trading sessions, and traders should focus more on those currencies that promise higher volatility and liquidity, and avoid those that are comparatively dormant due to passive market conditions.

See also :. Forex Trading Hours. What Is the Best Day Time to Trade Forex? What Is the Best Timeframe to Trade Forex? How Trading Sessions Affect Currency Pairs.

When you have some savings, it is useful to find an effective way to increase them. The Forex market opens on Monday at in Wellington, New Zealand time. During the overlap of the European and the U. Out of the four major Forex trading sessions which we identified above, only Japan keeps things straightforward all year round and does not change their clocks. Certain times of the day are more active than others and it is important to keep track of these.

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