If you are reading this, chances are that you are probably looking for reliable information (that doesn’t read like Greek) to help you learn how to trade forex. If so, you are in the right place. In this article, we will talk about one of the important things you need to master trading forex, which is an understanding of how forex market hours work. This will help you come up with a strategy that puts you in a best position to make profit from your forex trading by trading at the best possible time.
How Forex Trading Hours Work
The forex market stays open for 24 hours of the day except on weekends. This is because the forex market cuts across the different time zones in the globe. What this means is that for five days of the week you can make profitable trades at any time of the day because there is always a forex market open at any given time somewhere in the world. In Nigeria for example, forex trading for the week opens at 11:00 pm on Sunday and closes at 10:00 pm on Friday.
Now, you have to know that there are three major trading sessions driving the forex market. Here they are with the times they open and close in Nigerian time:
● Asian session (major market is in Tokyo): 12:00 am to 09:00 am
● European session (major market is in London): 08:00 am to 05:00 pm
● North American session (major market is in New York): 02:00 pm to 11:00 pm
The forex market is most active when any of the three major markets (Tokyo, London and New York) are trading as there are more traders placing orders to buy or sell. This leads to more obvious movement of price which in turn leads to better opportunities for profit.
So when is the Best Time to Trade Forex in Nigeria?
Since it’s not really a great strategy to stay up all day and night monitoring the forex market, it becomes necessary to figure out the best time to enter and exit a trade for maximum profit. While this will involve some independent research and analysis, it’s an advantage to know the best time of the day for forex trading as a person in Nigeria.
You will notice that there are points in the day where the major markets overlap. When this happens, there is even more opportunity for profit because there are even more traders and a greater volume of trade. For example, there is a one hour overlap between the Tokyo and London markets (that is, from 08:00 am to 09:00 am Nigerian time) where one is opening and the other is closing. More so, there is a whole three hours overlap between the London and New York markets.
It gets even more exciting when you add the fact that the London and New York markets are the two largest forex markets in the world. The three hours overlap (02:00 pm to 05:00 pm Nigerian time) between the London and New York markets is not only the busiest time of forex trading but also represents a large portion of the volume traded daily. It is therefore the best time to trade forex in Nigeria given that the possibility for profit is at the highest, especially if you are trading with currency pairs that include the euro, the British pound and the US dollars.
Start Practicing with a Demo Account
There is more to learn as a beginner towards getting a better grasp of the rewards and risks of forex trading. It is always a great idea to begin with a demo account to master trading strategies and timing. Sign up for a demo account here.