Quick question: What is the TV schedule that has the largest number of viewers? If you said during prime time, you are correct! What does this have to do with the Forex sessions?Well, as the “IBOPE” TV, liquidity in the Forex is higher when there are more people participating in the market.
So guess what time we have the best “IBOPE” in Forex? If you thought that this happens during the overlap of two sessions, you’d only be half right. Let’s discuss some of the features of these overlaps and you will understand why?
Tokyo – Overriding London
Liquidity during this period is low (thin). Usually, there is so much movement during the afternoon in the Asian session, the market practically sleeps. With European operators are just starting the day, this period is completely dry. This would be the ideal time to rest, play solitaire or study trades to be executed at the meeting in London and New York.
London – Overriding New York
It is in this section that the thing takes! During this period you can literally hear the operators scratching their heads, they know that now is the moment of truth. This is the busiest time of the day after all the operators of the two largest financial centers (London and New York) are active. It is during this period that we large movements, especially when the US and Canada are news stories thus released “late” in Europe.
If trends are established during the European session, we can see a continuation as US operators decide to establish their positions after analyzing the events of the beginning of the day. At the end of the session you should be careful because some European traders may be closing their positions, which could generate movements just before the lunch break in the US.
The best days of the week to trade Forex
We know that the London session is the busiest of all being so I ask what day of the week that generate the most moving? Below is a chart with the average pip major pairs for each day of the week:
As you can see in the chart above, it would probably be better to operate during the middle of the week, since the movement is greater. The busiest times are the best because they give you a greater chance of success and liquidity. In Friday’s motion until lunch time, then the market almost dies until its closure. This means that you as a Forex trader works Friday through noon! The weekend always starts early!
Managing your time wisely
Unless you are Dracula, who does not sleep, it is humanly impossible to operate in all sessions. Even if you could, why would? Here is the first secret of FOREX, the market is open 24 hours a day but that does not mean that the action happens all the time! In addition, sleep is an essential part of a healthy lifestyle! You need sleep to recharge your energy. You also have to pay attention to the more mundane tasks, like going out, chat with friends, take the dog for a walk, etc … If you are thinking of becoming a professional you definitely need to rest.
All operators must know when to trade. Not really, forget it. All operators must know when they should and should not negotiate. Knowing the ideal time you should operate and the times when you should sit down and play May Kart, can help you save money.
Below is a short that you can use as glue:
Best times tooperate:
1) When two sessions are open simultaneously (overlapping), of course! These are also the times when news can potentially generate volatility and movement. Make sure you know the time of opening and closing.
2) The European Session (London) tends to be the busiest of the three.
3) Usually the busiest happens midweek, more precisely on Tuesdays and Wednesdays.
Worst times to operate:
1) Sunday – Everyone is sleeping or enjoying the weekend!
2) Friday – Liquidity dies during the last part of the US session.
3) Holidays – Everyone is traveling or enjoying the family.
4) News considered very important – you can take a wash if you do not know operate!
5) During major events – like the World Cup, American Idol, the NBA Finals or the Superbowl.