When is it best to trade in the FX market to maximize your profit.

A lot of people have asked me about trading over the years. Here I will explain in detail about when it is best to trade.

The financial centers across the world plays host to numerous investment markets, but the forex market remains a major player that runs 24 hours a day, 6 days a week. On the other hand, stock and commodities market runs 5 days a week i.e. Mon – Fri during official business hours, but the Forex market hours spans around the clock.
Investors are able to benefit from the seamless 24-hour trade offering of the forex market when they utilize the market hours appropriately, which runs through varying time zones across different financial centers around the globe. There’s no unified location where people can go and trade forex, rather the market is a complex network of machines that enables traders access to buy and sell prices during forex market hours. The market hours depicts forex sessions that offers traders the privilege of buying, selling, exchanging and speculating on foreign exchange.
Currently, the first eight biggest financial hubs in the world are situated in the United Kingdom, USA, Japan, Singapore, Switzerland, Hong Kong, Australia, and France. As much as we do have other financial hubs littered across the globe, the forex sessions for these hubs are grouped into three sessions namely: Asian Session, European Session and North American Session. Although, we have financial hubs littered across the globe, it’s not an indication for profitability at all time during market hours. It therefore suggest that there are best time to trade forex:
Actual Opening Hours
There are distinct market hours for each financial hub i.e. Tokyo, Sydney, London, Frankfurt, and New York, yet the forex market hours is open 24 hours a day, and usually these distinct market hours run from 8:00 am – 4:00 pm, of each financial centers’ local time. This could mean that if the Tokyo opening hour is for 8:00 am on Monday morning, traders in Tokyo will be on the trading floor even though it is 09:00 pm EST, of the previous day i.e. Sunday. This does mean that if you’re staying in a New York apartment, you’ll definitely be able to trade the forex market on a Sunday night.
Overlapping of hours
There are times when two or more markets overlap due to numerous financial hubs that are present in the world today. For instance, there is an overlap between the London and New York market hours between the hours of 8:00 am to 12:00 pm EST, while Tokyo and London markets overlap from the hours of 3:00 am to 4:00 am EST. it is wise to enter the market during these forex sessions, as they offer liquidity at its peak during such market hours.
It is important to split the 24- hour forex market hours into manageable forex sessions, since it is clear that a trader cannot monitor the market at all times. Understanding the various forex sessions will guarantee a good knowledge of liquidity and when it is most suitable to jump into the market
Asian Session (Tokyo)
The Asian session or Tokyo session are names that are used interchangeably, Tokyo therefore represents the major financial hubs in Asia. The market session starts after the weekend elapses on Sunday and triggers the restoration of liquidity to the forex market. It is unofficial, but activity from Tokyo’s capital market heralds the Asian market hours, which come alive by midnight 5 am GMT. There are other hubs in Asia which contribute significantly to the volume during the Asian market hours and they include Australia, New Zealand, China, Russia and a couple of others. It will suffice to say that the start and expiration of the Asian session is stretched beyond the normal Tokyo market hours, due to the overlap of the various forex session for each financial center within the region. The market hours in Asia is observed to span between 11:00 pm and 8:00 am GMT.
European Session (London)
As the Asian session rolls on, just before its close, the European session kicks off to keep the global forex session active. The London session overlaps into the Asian session and this time zone has huge market volumes, usually characterized by a number of significant financial markets that on their own could stand in as symbolic financial capital for the European session.
Meanwhile, London is Europe’s financial capital and takes the privilege in dictating the distinguishing feature for the European market hours. London’s official business time runs between 7:30 am – 3:30 pm GMT. Although, just as observed in the European market hours, there’s an extension to this time due to the presence of other financial hubs in Europe i.e. France and Germany before the authorized UK open, while the expiration of the session is nudged back due to the dominance of volatility at the close of London’s market hours.
North American Session (New York)
The New York market hours comes online couple of hours after the Asian time, but just about half way through the European session. Activities in the United States dominates the North American session, although there are a few contributions from Canada, Mexico, Brazil and a few other South American countries. It is surprising that forex trading hours in New York City sparks the peak in volatility and volume that explains the North American session. It is unofficial, but considering the premature movement in commodity trading, financial futures and the intense economic data releases, the New York market hours kicks off unofficially at 12:00 pm GMT.
Splitting the Forex Market Hours
The global forex market is not controlled by a single exchange house, however it combines a system of exchanges and brokerages across the globe. Forex trading hours is dependent on when trading kicks off in each of the participating region:
New York 8am – 5 pm EST (approx. 20% of total FX volume)
Tokyo 7pm – 4 am EST (approx. 6% of total FX volume)
Sydney 5pm – 2 am EST (approx. 4% of total FX volume)
London 3am – 12 noon EST (approx. 35% of total FX volume)
Best Times to Trade:
Usually the best times to trade remains when two sessions overlap i.e. when Tokyo overlaps with London or when London overlaps with New York. Major economic events could also trigger volatility, thus driving directional movements. The London session tends to be the best forex trading hours, while mid-week basically displays the most movement, due to widening of pip range for most majors. Fig. 1.0 depicts the GBP/USD over a 2- year period, showing increased volatility on Wednesdays, as the Average true range (ATR) value stands at 110.5 pips over the period.

Fig. 1.0
Worst Times to Trade:
Some of the worst times to trade included Sundays (since everyone is possibly asleep or enjoying the weekend), Fridays (when traders are probably exhausted and are taking a break), during major data releases (when investors are scared of getting whipsawed) and during holidays (Christmas & New Year holiday are periods when everyone want to spend time with family, take holiday trips, etc., and trade volume across geo-political zones generally dip).