As a forex trader, choosing the right and ideal forex trading hours can be the difference between success and failure. Understanding when the active time spans of the forex market are, as well as how different time zones around the world influence your trading decisions, is key to finding success in currency trading.
Therefore, especially for novice traders, you must know when is the best forex trading hour to start trading in order to increase the opportunity to make a profit.
Forex Market Hours
You need to know that this forex market network is built in the process of transactions involving banking institutions and financial institutions that are active in countries around the world. This is the reason why the forex market can last for 24 hours. In other words, forex trading never takes place centrally in one particular place..
The opening of these forex trading hours is from business hours in the city of Sydney, which is the financial center of Australia. Then followed by the Asian financial center opened following working hours in the city of Tokyo, Japan. Next is the financial center in Europe while banking institutions in cities such as London, England, Frankfurt, Germany, and other cities in Europe. As soon as opening hours in Europe are almost over, the American financial center in New York City begins.how to Choosing the Right and Ideal Forex Trading Hours for Profit
Forex Trading Session
Forex market active hours are usually divided into three or four sessions. The division of forex trading hours into three sessions brings together the active hours in Australia (Sydney) and Asia (Tokyo). While forex trading hours in four sessions do not combine the two sessions. These forex trading hours are listed with GMT or Greenwich Mean Time, so it is important for novice traders, especially to know the exact time conversion in Indonesia.
If converting to WIB, then this GMT time must be added 7 hours. This means if the session starts at 05:00 GMT, then in Indonesia it starts at 12:00 WIB. In the inclusion of forex trading hours, it is also usual to write two versions of the opening time. This is because several countries in Europe as well as the United States have implemented the DST (Daylight Saving Time) system which usually takes place at the turn of summer.
This DST changes forex trading hours for 1 hour at the opening as well as at the close of the session. The implementation of the DST system usually takes place from March to November. Forex trading hours will return to normal once summer is over and DST system will no longer be implemented. To make it easier to understand, the following is an explanation of forex trading hours for each trading session.
A new day in Sydney will begin after work hours in New York are almost over. And so it continues every day. This forex trading hour takes place like a relay that eventually creates the forex trading hour cycle mentioned earlier, starting on Monday to Saturday morning.
Asian Session
In the Asian session, there were five cities that became the financial centers that underlie trading activities. The cities that are members of the Asian session are Sydney, Tokyo, Singapore, Hong Kong, and Shanghai. For the total trading scale in the Sydney session, including very small, most of the new traders will be active after the active Tokyo session.
According to economic data, trading in the Asian session is strongly influenced by three regions that are considered as the main economic movement areas, namely Australia, Japan and China. This is because countries in Europe and America are not yet active (it is still night). That's why the Asian session is relatively quiet movement.
Even though the Asian session was relatively quiet, there was still trading going on. The most heavily traded currencies are the Japanese Yen (JPY), then the Australian Dollar (AUD), and the New Zealand Dollar (NZD). The Asian session starts with Sydney opening hours at 04:00 WIB, and will close at 14:00 WIB. Then proceed with Tokyo opening hours at 06:00 WIB, which will close at 15:00 WIB.
European session
For the European session, the opening and closing hours are based on the active hours of London, England, which is at 15:00 WIB until closing at 00:00 WIB. Besides London, the city of Frankfurt, Germany is also the axis of money movement in the forex market. Although not a pivot, all other European Union countries also support market movements.During forex trading hours in this session, all currencies will be active. However, the Pound sterling (GBP) and Euro (EUR) have bigger movements when compared to the others. This is natural because London itself has been known to the world as the world's financial axis since the Middle Ages.
Forex trading hours in the European session are the busiest because the times are close to and overlap with the opening hours in the American session. Many traders from Asia, especially Indonesia, are also active in this European session because the time is approaching midnight, including Indonesian traders can still tolerate.
American Session
New York is also one of the cities whose economic development is so rapid, making it a financial axis in the modern economic phase whose profile almost matches the strength of London. The American session which departed from New York was also quite busy with trading because the US Dollar (USD) is the major currency pair in the forex market. That means, most currency pairs must pair with USD.
USD is often found weakening in the Asian session because the economic sectors of countries in America have not been active at that time. But it will not last long once entered the American session. This is why novice traders are asked to be vigilant when trading in the American session because of the potential for a trend reversal in this session.
This American Session will start at 19:00 WIB and close at 04:00 WIB the next day, the time almost overlaps with the Australian Session from the city of Sydney. The time span in which one session overlaps with another session is known as the overlap period.
Precise Forex Trading Hours
For traders in Indonesia, one of the most ideal times to trade is when the two sessions overlap between the European and American sessions, or between 19:00 – 22:00 WIB. During these forex trading hours, price movements tend to be high. Forex trading opportunities also open higher, allowing traders to earn a lot of profit in a relatively short time.
However, this does not mean that forex trading hours outside of these times are not profitable. You can still make profit by trading in other sessions as long as you apply the right trading strategy. This means that the ideal trading time should also be accompanied by your overall trading style and strategy.
A simple example like this. If a trader has a low risk appetite or is conservative and tends to play it safe, the most ideal trading time is between the Asian session and the beginning of the European session. You can also close positions before the American session starts. In this way, relative risk can be controlled even if there are fewer trading opportunities.
On the other hand, if you have a high enough risk appetite, then you should start trading from the beginning of the European session until the end of the American session. These two sessions had the largest price movements with their peaks in the aforementioned overlap. The opportunity to trade is very large, but the risk of loss is also greater
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