Until you develop sense of forex market which only comes with experience, you might ask yourself when to trade and when to not. This is a completely valid question and beginner forex traders often ask me this, as answers found on various forex forums tend to vary a lot.

In my opinion the answer depends most on your trading style. For some short-term forex trading times almost do not matter. I suggest that if you are forex day trader, it is better to avoid trading at time of news releases or major announcements. But if a news is scheduled to be posted at exact hour, usually all the major players await the news, so you might use this quiet time (hour or two before) for some nice scalp trades, as market usually sidetracks during this period.

Mid-term (swing trading) and long-term time frames traders are usually less worried about time when they enter/exit the market.

What Are The Best Hours For Forex Trading?

Because Forex is very dynamic market with millions of traders trading concurrently, high number of price oscillations happen every single minute. Many short term traders use this characteristic to enter the market many times every day and pull out smaller amounts of profit.

If you seek to find an appreciable number of profitable trades you need to enter the forex market at the best period of time, i.e., when the activity, the volume of transactions, is the highest.

The best forex trading time is when market is the most active. Activity means that there is big volume of trades. Active currency usually means the moves will create a good chance to catch the trade and make some profit. Some traders even wait for the major news or announcements to hit the public, and then try to catch the wave, but this is considered very risky, as move can be quite fast, and if it moves agains you, even stop loss can not rescue you as slippage is too great.

However, although it seems to be not very important at the beginning, the right time to trade is one of the most crucial points to be successful in trading at the forex market.

So, when should you trade and why?

This is the breakdown of OPEN Market Times for your reference:

* New York Market trade times: 8am-4pm EST
* London Market trade times: 2am-12Noon EST
* Great Britain Market trade times: 3am-11am EST
* Tokyo Market trade times: 8pm-4am EST
* Australia Market trade times: 7pm-3am EST

If you pay attention to the last schedule you will notice that there are two times when two of the major markets overlap during trading hours; between 2am and 4am EST (Asian/European) and between 8am to 12pm EST(European/N. American).

At those overlapping trading hours you'll find the highest volume of trades and therefore more chances for profitable trade. For example, trading EUR/USD, GBP/USD currency pairs usually gives good results between 8:00 am and 12:00 noon EST when two markets for those currencies are active. Keep in mind that the US & UK markets account for more than 50% of the market transactions, and that nearly two-thirds of NY activity occurs in the morning hours while European markets are open!

So here you have it, if you want to find a great number of profitable trades, focus on the hours when the markets tend to make their biggest moves, i.e., during these big markets overlaps. For more information on forex trading hours go here.