Do you know how to trade in Expert Option?
Yes, you do.
And, do you also know how to navigate the various keys on the Expert Option trading platform?
Of course, you do.
Better still, you know the various assets offered by Expert Option and how to choose the asset to trade and to actually trade it.
Is that enough knowledge on trading?
Is there something that you need to know which might have a say on whether yours is a success story or another failure?
Most newbies might not have come across this but the time you trade directly impacts your trading outcome.
This is so especially as concerns Forex or currency trading with any broker, including Expert Option.
Why Timing is everything.
So what is it about trading time especially for currency pairs?
It is known that currency trading comes in sessions and that different sessions open and close during different times of the day.
That is where the issue of timing comes in.
The different currency trading sessions also have different currency pairs affiliated to them, which are in respect to the various economies represented within each trading session.
What all that means is that you need to understand the various trading sessions.
That is as regards the times of open for each, the times for close for each, times of overlap if any sessions overlap, and most importantly, which currency pairs to trade in each session.
There is also the issue of volatility during each trading session.
Volatility for currency pairs affiliated to any trading session is highest during the times when that trading session is open and lowest during the time when the session is closed.
That brings in the issue of traders being either high volatility bound or low volatility bound and knowing which currency pairs to trade at what time in respect to the sessions.
When is the Best Time to Trade in Expert Option?
Let us handle when the best time to trade in Expert Option is, using the following breakdown:
- Forex Trading Sessions.
- Choosing the Best Trading Hours in Expert Option.
- Best Time of the Day to Trade in Expert Option.
- Best Time of the Week to Trade in Expert Option.
- News Trading.
Forex Trading Sessions.
There do exist four major Forex trading sessions.
The four occur in the order of Sydney, Tokyo, London, and New York.
The Tokyo session is often referred to as the Asian session, the London as the European session while the New York session is often referred to as the North American session.
The most active of the four major Forex trading sessions are the Tokyo, London, and New York sessions. You would also put them as the Asian, European, and North American sessions respectively.
Now, you need to note that the times of open and close of different Forex trading sessions vary depending on the time of the year.
This is because some countries shift to or from Daylight Savings Time (DST).
Below will be a table showing when different Forex trading sessions open considering the different times of the year due to DST shift.
Summer in the U.S (March/April to October/November).
Here are the opening and closing times of the major four Forex sessions during summer in the U.S:
|Session Open/Close||EDT||BST (GMT+1)|
|Sydney Open||5:00 PM||10:00 PM|
|Sydney Close||2:00 AM||7:00 AM|
|Tokyo Open||8:00 PM||1:00 AM|
|Tokyo Close||5:00 AM||10:00 AM|
|London Open||3:00 AM||8:00 AM|
|London Close||11:00 AM||4:00 PM|
|New York Open||8:00 AM||1:00 PM|
|New York Close||5:00 PM||10:00 PM|
Winter in the U.S (October/November to March/April).
Here are the opening and closing times of the major four Forex sessions during winter in the U.S:
|Sydney Open||3:00 PM||8:00 PM|
|Sydney Close||12:00 AM||5:00 AM|
|Tokyo Open||7:00 PM||12:00 AM|
|Tokyo Close||4:00 AM||9:00 AM|
|London Open||3:00 AM||8:00 AM|
|London Close||11:00 AM||4:00 PM|
|New York Open||8:00 AM||1:00 PM|
|New York Close||5:00 PM||10:00 PM|
Now that you know when each Forex session opens and closes during different periods of the year, how about what to trade during the times when each session is open? Here is the list of each Forex session and the currency pairs to trade when each is open:
- Sydney – AUD/CAD, AUD/CHF, AUD/JPY, AUD/NZD, GBP/JPY, and NZD/JPY.
- Tokyo – AUD/CAD, AUD/CHF, AUD/JPY, AUD/NZD, GBP/JPY, and NZD/JPY.
- London – GBP/USD, EUR/USD, USD/JPY, USD/CHF, EUR/JPY, and GBP/JPY.
- New York – EUR/USD, USD/JPY, GBP/USD, EUR/JPY, GBP/JPY, and USD/CHF.
- London-New York Overlap – EUR/JPY, USD/JPY, USD/CHF, USD/CAD, GBP/USD, GBP/JPY, EUR/USD, and EUR/GBP.
It would also help you to know the average pip movements of some of the major currency pairs during each of the three most active Forex sessions.
Here are the specifications:
|Currency Pair.||Tokyo Session.||London Session.||New York Session.|
Note that it is during the London Forex session when almost all currency pairs experience the highest volatility.
It means that the London Forex session is the most active of them all and so it can be the most ideal to trade Forex.
Trading Session Overlaps.
We mentioned that when one Forex trading session is open, the rest are closed, except a few which overlap with each other.
There is an overlap during summer in the U.S from 3:00 AM ET to 4:00 AM ET between Tokyo and London Forex sessions.
The most significant overlap is between the London and New York Forex sessions which occur during both summer and winter in the U.S between 8:00 AM ET and 12:00PM ET.
The London-New York overlap provides the most liquid and volatile conditions of the day to trade.
So many currency pairs have high volatility during this overlap and therefore so many highly profitable opportunities are present during such period.
The same applies to the Tokyo-London overlap but to a lesser extent.
Choosing the Best Trading Hours in Expert Option.
Each Individual Trader in the Expert option has the time to trade which suits them and their trading strategies best.
Some prefer trading in the morning, others in the afternoon, while still others prefer to trade at night! Let us deal with each cohort of Traders separately.
Morning hours to noon Trading (5 am GMT to 12 pm GMT).
Here, Sydney, Tokyo, and London Sessions are Open.
This means that traders who prefer Currency pairs with high Volatility can trade the following currency pairs:
Those who prefer Currency pairs with average volatility can trade these currency pairs:
Afternoon hours to Early evening Trading (12 pm GMT to 7 pm GMT).
Here, the New York Session is Open.
Traders who prefer high volatility Currency pairs can trade the following currency pairs:
Traders who prefer average volatility Currency pairs can trade these currency pairs:
Late evening to Early Morning Trading (7 pm GMT to 5 am GMT).
Here, the Asian Session is Open. (Sydney and Tokyo Sessions).
Traders with a preference for high volatility Currency pairs can trade this currency pair:
Those who prefer average volatility Currency pairs can trade the following currency pairs:
Identify a time interval that suits you and your trading strategies best and utilize it.
From our discussion, the Markets are most volatile during the Afternoon to Early evening trading sessions (12.00 GMT to 19.00 GMT).
That time interval offers the best trading window. You can utilize it if free during that period.
However, traders who may not make it to trade during that time interval have a wide range of other time intervals to utilize.
After all, not all traders prefer high volatility Currency pairs. Some prefer Currency pairs of average volatility.
Each trading session has Currency pairs of both high and average volatility. Know yourself and be exactly that.
The Best Time of the Day to Trade in Expert Option.
From the section on Forex trading sessions, you understand that the best time to trade is when a particular Forex trading session is open.
The best thing to trade during that open session is the currency pairs related to such session as we explained.
Now, about the best time of the day to trade Forex, it is not simply when Forex trading sessions are open. There is more to explain as regards that matter.
Note that the best time to trade Forex must be defined by the presence of the highest liquidity of the day.
That is to mean many market participants are in the market and so prices are moving rapidly up or down.
When liquidity is low because few market participants are away, prices of currency pairs tend to consolidate and not move up or down with any significant determination.
Now, you would be tempted to think that moments of highest liquidity and hence the highest number of market players are when Forex sessions overlap.
Well, that may be partly true but not entirely so.
Tokyo-London Session Overlap.
One of the session overlaps we highlighted is the Tokyo-London session overlap.
Would you consider this session one of the best times of the day to trade Forex?
Liquidity in this overlap is quite low because European traders are just preparing to enter the market.
That means such overlap is not a time to trade but rather, prepare to catch some trends for the London and New York sessions.
Have we ruled out the Tokyo-London overlap as the best time of the day to trade?
Yes, indeed we have! It is not the best time of the day to trade Forex for the reasons we have stated.
London-New York Session Overlap.
Let us then look into the other overlap which we termed the most significant in the Forex market.
So is this the best time to trade Forex or it still isn’t it?
Let us see if it makes it to be the best time of the day to storm the markets and make a kill.
Market liquidity is at its peak from 10:00 AM GMT to 3:00 PM GMT.
Let us look at the times when the London and New York sessions open and close.
The London Session opens at 8:00 AM GMT and closes at 4:00 PM GMT while the New York session opens at 1:00 PM GMT and closes at 10:00 PM GMT.
The time 10:00 AM GMT represents two hours into the London session and three hours before the open of the New York session.
The time 3:00 PM GMT represents one hour before the close of the London session and two hours into the New York session.
You can see how the overlap comes in here.
So the highest liquidity of the market is during mainly the London and then the New York Forex trading sessions.
So does the London-New York session overlap qualify to be the best time of the day to trade?
Definitely so, because you can see that the period which we termed as the peak of the Forex market liquidity (10:00 AM GMT to 3:00 PM) falls within the overlap.
It is during the London-New York session overlap when market liquidity is highest.
This makes such overlap the best time of the day to trade Forex.
It is an overlap that incorporates the busiest Forex trading sessions of the Forex market and so you would expect such period to be the best to trade.
This period is also characterized by major News events. The U.S and Canada News release cause significant price moves during this overlap.
Later, there is also News from Europe which may contribute to the significant price moves experienced here.
So what is our verdict?
That the best time of the day to trade is when the London Forex session and the New York session are open.
That is so especially during the period when the two periods overlap.
Wondering what to trade during that best time of the day to trade Forex?
The specific currency pairs to trade during the London and the New York sessions are well indicated in the previous guide.
But then here is a reminder for you:
- London Session – GBP/USD, EUR/USD, USD/JPY, USD/CHF, EUR/JPY, and GBP/JPY.
- New York Session – EUR/USD, USD/JPY, GBP/USD, EUR/JPY, GBP/JPY, and USD/CHF.
- London-New York Session Overlap – EUR/JPY, USD/JPY, USD/CHF, USD/CAD, GBP/USD, GBP/JPY, EUR/USD, and EUR/GBP.
You can also refer to the table of average Pip movement of each of the currency pairs in the Forex trading session’s section to know which pairs to prioritize.
The Best Time of the Week to Trade in Expert Option.
Now, when do you think is the best time of the week to trade Forex?
Is it on Monday, when the Forex market has just opened from the weekend break?
Is it midweek when the market has been open for some days?
Or is it on Friday when the Forex market is about to close for the weekend break?
We should answer the above question by looking at data to draw a conclusion.
I will give you data that will be showing the average Pip movement of the major currency pairs on each day of the week.
Afterward, we can then look at the data to determine when the best time of the week to trade Forex is.
Daily Average Pip Movement of Major Currency Pairs.
The table below shows a comparative analysis of the daily average Pip movement of major currency pairs:
Above is the data showing the average pip movement of the major currency pairs on each day of the week when the Forex market is open.
Which days have the highest average Pip movement? Which days have the lowest average Pip movement?
From the data in the table above, the average Pip movement tends to be lowest when the Forex market opens on Sunday from the weekend break.
It then increases gradually to peak at midweek.
The average Pip movement then seems to fall on Friday when the market nears close for the weekend break.
Market activity is usually high on Friday till 12:00PM EST and then falls as the markets become still until the 5:00 PM EST close.
The average Pip movement of a currency pair is reflective of high or low the market liquidity is as regards that pair.
Low average Pip movement translates into low market liquidity hence fewer trading opportunities.
However, high average Pip movement means high market liquidity hence more trading opportunities.
The verdict from the Data.
From our data, the highest market liquidity reflected by the highest average Pip movement is present at midweek.
That is beginning from Tuesday to Thursday.
What you choose to do with this information is not up to you, but to know that these are the best days of the week to trade Forex.
Tuesday, Wednesday, and Thursday are the best days of the week to trade Forex.
In other words, midweek is the best time of the week to trade Forex.
Now, while choosing to trade Forex on Tuesday, Wednesday and Thursday, you need to consider the best times of the day to trade Forex. Such was covered in the previous guide.
If you are wondering when not to trade during a week, it is any other day apart from the midweek days mentioned as the best to trade.
Worse still, is when you choose to trade on Sundays, Fridays, and holidays when everyone else is resting and market liquidity is at its knees.
You should also avoid trading during major news events because News triggers unprecedented price movements.
Must I emphasize that you need to be in a good emotional state before you can trade Forex even during those best days of the week? You know you need that as well.
News Trading in Expert Option.
Another factor that determines when the best time to trade in Expert Option is the time of the release of significant News or data affecting the assets of interest.
So which economic numbers are released when which data is most relevant to traders, and how should traders act on this information?
It is the question we try to address in this section.
Which Currencies Are Impacted Most by News Releases?
There are eight major currencies available for trading at most currency brokers.
For any of them, there is always a piece of economic data meant for release that Forex traders can use to make informed trading decisions.
To be precise, seven or more pieces of data are released almost every weekday, with exception of holidays, from the eight major most-followed countries.
That means that traders anticipating to trade the news have plenty of opportunities to exploit during such releases. The eight major currencies we are talking about are as follows:
- U.S. dollar (USD)
- Euro (EUR)
- British pound (GBP)
- Japanese yen (JPY)
- Swiss franc (CHF)
- The Canadian dollar (CAD)
- Australian dollar (AUD)
- New Zealand dollar (NZD)
From the above major currencies, there are many liquid currency pairs derived, which include the following major currency pairs:
When Are Key News Releases For Currencies?
The table below provides the approximate times in Eastern Time (EST), for the most important economic releases for each of the most-followed countries.
There is also information on the currency to monitor during such releases, to means that you will monitor any major currency pair containing such currency. So here we go:
|U.S.||USD||8:30 to 10 a.m.|
|Japan||JPY||6:50 to 11:30 p.m.|
|Canada||CAD||7 to 8:30 a.m.|
|U.K.||GBP||2 to 4:30 a.m.|
|Italy||EUR||3:45 to 5 a.m.|
|Germany||EUR||2 to 6 a.m.|
|France||EUR||2:45 to 4 a.m.|
|Switzerland||CHF||1:45 to 5:30 a.m.|
|New Zealand||NZD||4:45 to 9 p.m.|
|Australia||AUD||5:30 to 7:30 p.m.|
What Are the Key Releases From Such News?
When trading news, you first have to know which releases are actually expected that week. Second, knowing which data is important for each release is also key.
Generally speaking, the most important information relates to changes in interest rates, inflation, and economic growth, like retail sales, manufacturing, and industrial production.
Find below some major areas of focus during News releases:
- Interest rate decisions
- Retail sales
- Inflation (consumer price or producer price)
- Industrial production
- Business sentiment surveys
- Consumer confidence surveys
- Trade balance
- Manufacturing sector surveys
Depending on the current state of the economy, the relative importance of these releases may change. For example, unemployment may be more important in one month than trade or interest rate decisions. Therefore, it is important to keep on top of what the market is focusing on at the moment.
How Long Does the Effect of News Releases Last?
Martin D. D. Evans and Richard K. Lyons, in their study published in the Journal of International Money and Finance (2004), made significant revelations.
According to the study, the market could still be reacting to news releases hours to days, after their release.
The effect on returns generally occurs on the first or second day, but may still delay until the fourth day, according to the study.
The impact on the flow of buy and sell orders, on the other hand, is still very pronounced on the third day and is observable on the fourth day.
How Do You Actually Trade News Releases?
From experience, the most common way to trade news is to look for a period of consolidation or uncertainty ahead of a big news release.
You can then trade the breakout on the back of the news release. This can be done on both a short-term basis (intraday) or over several days.
Verdict on News Trading.
Now that you know when the major news releases happen, you can trade them if you are a news trader in Expert Option.
Knowing when news are released also serves as a warning to technical traders in Expert Option so that they can quit trading during such releases and the periods during which impact of the news is felt.
That is because news events have been known to quash technical set-ups and result in significant losses to technical traders.
Wrapping Up on When the Best Time to Trade in Expert Option is.
You now understand that just knowing how to place trades on the various assets was not enough.
You would actually rather know when to trade and what to trade then, because it is then that you can reap big, trading in Expert Option or with any other broker.
The information on when the best time to trade for the day, for the week, and in response to news releases is all yours.
Do the needful with it, by adjusting your trading in line with the best times to trade in Expert Option, for optimum gains and profitability.