The US Forex trading session begins at the start of the business day in New York, US time. This coincides with the opening time of the New York Stock Exchange NYSE.

It also ends at the end of the business day when the NYSE closes. If you have an Android smart phone, you can download this FX hours app. It shows you when each Forex trading session opens and closes in terms of your local time. See the screen shot below. Here is something similar for iPhone users. It is because more participants are coming online and the number of transactions tends to increase. This creates more supply and demand and pushes the price up or down. When trading sessions overlap, the market is more active, liquidity increases and the price becomes more volatile.

You want to be capturing significant price trends to maximize your potential to profit. When the price trends and closes higher or lower for the day or week, it usually starts earlier in the trading session.

You also want to be able to get in and out of the market easily. So the best times of day to trade Forex is when it is highly liquid. Having said that, the Forex market is the most liquid market in the world.

You can buy or sell at any time. Spreads are usually tighter at these times too, which reduces your trading costs. This is another reason why these times are the best times of day to trade Forex. Since there are three main trading sessions, there are three times each day that are the best times to trade Forex.

Each trading session is not necessarily and equally the best time to trade though. Also, this does not mean you should trade every day or at each of these times. However, you will observe that these times often do provide the best times to trade. When you optimize your market timing and the entry and exit price, you can limit risk and maximize your potential to profit. The image below shows the best times of day to trade Forex during daylight saving time.

You can convert these times to your local time or follow the time in the market watch window. Which means volatility will likely be higher or lower at certain times of the day and during each trading session. Volumes, liquidity and volatility are also different between currency pairs. Some currency pairs are naturally more volatile than others. The most liquid and most volatile times to trade under normal market conditions is when the EU and US sessions overlap.

Spreads are tighter during these times and the price tends to trend better too. In my opinion, the best opportunities can be found at the beginning of the US session. The second best times of day to trade are at the beginning of the EU session and the London open. The least liquid time is during the Asian session.

The Asian session is also categorized by lower volatility and wider spreads. This is particularly the case shortly after the market rolls over. If you open a trade around this time, your transaction cost will likely be higher. In my opinion, the Asian session is the third best time of day to trade Forex. The market tends to consolidate and become range bound during this time. Of course, this all depends on your trading style and strategy….. Now that you know when to look for the best trading opportunities, also consider what currencies to trade.

Ideally, you would want to be following currencies that are active for the session. For example, during the Asian session, consider looking for trading opportunities in the AUD, NZD and JPY.

These are the most active trading sessions so it will be. You just might be able to get an optimal trade entry for this currency pair during the Asian session. Generally speaking, it will be to your advantage to trade currency pairs for those countries that are online at the time. I would suggest observing what the price does and has done during these times on your chart. You can decide what currency pairs to trade depending on your findings and what suits you.

Trading is not an exact science, there are no certainties and markets do change over time. It is about determining patterns and trends, assessing probabilities and balancing risk vs potential reward.

Before we begin, here is a chart that shows the difference between a 1, 5, and minute chart. They all show 11 hours of price data on the same day, but there is a significant difference in detail. One is not better than another. But one may be more favorable to you because it provides more trading opportunities potentially , or has a cleaner look. Also, it is possible to combine time frames.

A 1-minute time frame may work well for someone who likes seeing detail in the price movements and potentially getting in and out for short-term trades that only last a few minutes. Because price bars occur frequently, 1-minute chart traders typically have the opportunity to take more trades per day than larger time frames.

With a winning system, more trades means more profit and faster compounding of the account. I use a one-minute chart to day trade the EURUSD every day, for about 1 to 2 hours per day. With trades based on smaller candles than the higher time frames stop losses and profit targets tend to be smaller than those used by higher time frame traders. A trader could use a small stop loss on the 1-minute chart and aim for large reward:risk trades.

Waiting for larger profits may mean less trades throughout the day. Many forex brokers offer 30x to 50x leverage or more in some countries. Position sizing for day trading stocks is capped at 4x leverage. One day trading position may use most of the available capital in the account, leaving little for other trading activities, such as swing trades.

You can always choose to allocate a specific amount to day trades, and leave the rest of the capital for other trades. Main takeaway : the 1-minute chart is for people who want to maximize their trading time with more trades and typically large position sizes with small stop losses and profit targets but targets can be expanded if desired. Trading the five-minute requires focus, but less constant attention than the 1-minute chart.

Candles are forming every five minutes, so there is more time between data points. If a trader waits for candles to close before acting, this means no action is taken for at least 5-minute intervals, and often longer.

One or two trades may develop in a two-hour trading window, possibly more, but less than on the 1-minute. Stop losses and profit targets tend to be larger than on the 1-minute chart.

Positions sizes are smaller than those on a 1-minute chart because candles are bigger on the 5-minute chart which means likely a greater distance between the chosen entry and exit. Because position sizes are a bit smaller than the 1-minute chart, traders may be able to have multiple positions at the same time. Again, you can always allocate a specific amount to each day trade to assure there is enough capital for all the positions you wish to take.

Main takeaway : the 5-minute chart is for people who want to focus on larger intra-day movements, receiving fewer data points, with moderate positions sizes smaller than 1-minute, larger than higher time frames. The chart examples, which show example trades on the same day, but on different time frames, are not meant to say one is better than the other. They just highlight some of the differences screen time, number of trades, size of stop losses and profits.

A or minute chart time frame is for someone who wants to see the major trends and movements throughout the trading day, not each little gyration 5-minute, and to a greater extent the 1-minute. Traders on this time frame may only be taking one or two trades a day. If only trading during a two-hour or less window, many days may have no trade signals.

Trading this time frame may require more time in front of the screen since it takes longer to get into and out of trades. Stop losses and profit targets tend to be larger than on the 5-minute chart. Positions sizes are smaller than those on a 5-minute chart because candles are bigger on the 10 or minute chart which likely means a greater stop loss distance.

Main takeaway : the 10 or minute chart is for people who want to focus on the large price movements throughout the day. They prefer cleaner movement and are likely after only one or two trades over multiple hours of trading. Some traders only trade on one time frame, while others use multiple time frames to produce trading opportunities. When trading a single time frame, if you see a trade on that time frame you take that trade. No need to check other time frames for confirmation. Multiple time frame trading means you look at a longer-term chart and use it as a filter for trades on the lower time frame.

In this case, a trader may check the 5-minute or minute for the overall trend direction, and then look for opportunities to enter in that trend direction on the 1-minute chart, for example. Or they may use the minute chart for overall direction and then use the 5-minute or minute chart to enter, as another example. Below is minute chart of Draftkings DKNG on the left, and a 5-minute chart on the right.

The minute provided a potential trade setup, then the 5-minute was used to find an entry, and stop loss. There is no perfect combination or answer. A winning system can be built on any time frame, or any combination of time frames. But understanding the pros and cons will hopefully help you decide which is best for YOU. Time frames are often discussed as if they are the only charting option.

They are not. There are chart types based on things other than time. Tick charts are based on a fixed number of transactions. A bar completes once there have been a certain number of transactions. This means during busy times bars may form quickly, but during quiet times it may take many minutes or even hours for a bar to form.

I like using these when I trade futures contracts. Renko charts are bricks that form once the price has moved a certain amount. They keep forming as the price moves in the same direction and by the required amount. If the price reverses the equivalent of two brick sizes, the bricks change color and start moving in the other direction. The bricks are not based on time but rather price movement. For forex day trading I use the 1-minute chart, only.

For stock day trading I use the 1-minute chart, only. When companies merge, and acquisitions are finalized, the dollar can gain or lose value instantly. Tokyo, Japan open 7 p. is the first Asian trading center to open, takes in the largest bulk of Asian trading, just ahead of Hong Kong and Singapore. dollar vs. Japanese yen. Sydney, Australia open 5 p. is where the trading day officially begins. While it is the smallest of the mega-markets, it sees a lot of initial action when the markets reopen on Sunday afternoon because individual traders and financial institutions are trying to regroup after the long pause since Friday afternoon.

London, Great Britain open 3 a. to noon : The United Kingdom U. dominates the currency markets worldwide, and London is its main component.

The city also has a big impact on currency fluctuations because Britain's central bank, the Bank of England, which sets interest rates and controls the monetary policy of the GBP, has its headquarters in London.

Forex trends often originate in London as well, which is a great thing for technical traders to keep in mind. Technical trading involves analysis to identify opportunities using statistical trends, momentum, and price movement. Currency trading is unique because of its hours of operation. The week begins at 5 p. EST on Sunday and runs until 5 p.

on Friday. Not all hours of the day are equally good for trading. The best time to trade is when the market is most active. When more than one of the four markets are open simultaneously, there will be a heightened trading atmosphere, which means there will be more significant fluctuation in currency pairs.

When only one market is open, currency pairs tend to get locked in a tight pip spread of roughly 30 pips of movement. Two markets opening at once can easily see movement north of 70 pips, particularly when big news is released.

The best time to trade is during overlaps in trading times between open markets. Overlaps equal higher price ranges, resulting in greater opportunities. Here is a closer look at the three overlaps that happen each day:. While understanding the markets and their overlaps can aid a trader in arranging his or her trading schedule, there is one influence that should not be forgotten: the release of the news. A big news release has the power to enhance a normally slow trading period.

When a major announcement is made regarding economic data —especially when it goes against the predicted forecast—currency can lose or gain value within a matter of seconds. Even though dozens of economic releases happen each weekday in all time zones and affect all currencies, a trader does not need to be aware of all of them.

It is important to prioritize news releases between those that need to be watched versus those that should be monitored. In general, the more economic growth a country produces, the more positive the economy is seen by international investors. Investment capital tends to flow to the countries that are believed to have good growth prospects and subsequently, good investment opportunities, which leads the country's exchange strengthening.

Also, a country that has higher interest rates through their government bonds tend to attract investment capital as foreign investors chase high yield opportunities.

The right time frame will vary by person, the strategy they use, and how they like to spend their trading time relaxed versus more intense. Here are the benefits and drawbacks of each day trading time frame so you can decide which one is right for you. More details are provided below. Charts are typically broken down into several time frames, including 1 minute, 5-minute, minute, minute, and everything in between and beyond.

Before we begin, here is a chart that shows the difference between a 1, 5, and minute chart. They all show 11 hours of price data on the same day, but there is a significant difference in detail. One is not better than another. But one may be more favorable to you because it provides more trading opportunities potentially , or has a cleaner look. Also, it is possible to combine time frames. A 1-minute time frame may work well for someone who likes seeing detail in the price movements and potentially getting in and out for short-term trades that only last a few minutes.

Because price bars occur frequently, 1-minute chart traders typically have the opportunity to take more trades per day than larger time frames. With a winning system, more trades means more profit and faster compounding of the account.

I use a one-minute chart to day trade the EURUSD every day, for about 1 to 2 hours per day. With trades based on smaller candles than the higher time frames stop losses and profit targets tend to be smaller than those used by higher time frame traders.

A trader could use a small stop loss on the 1-minute chart and aim for large reward:risk trades. Waiting for larger profits may mean less trades throughout the day. Many forex brokers offer 30x to 50x leverage or more in some countries. Position sizing for day trading stocks is capped at 4x leverage. One day trading position may use most of the available capital in the account, leaving little for other trading activities, such as swing trades.

You can always choose to allocate a specific amount to day trades, and leave the rest of the capital for other trades. Main takeaway : the 1-minute chart is for people who want to maximize their trading time with more trades and typically large position sizes with small stop losses and profit targets but targets can be expanded if desired. Trading the five-minute requires focus, but less constant attention than the 1-minute chart.

Candles are forming every five minutes, so there is more time between data points. If a trader waits for candles to close before acting, this means no action is taken for at least 5-minute intervals, and often longer. One or two trades may develop in a two-hour trading window, possibly more, but less than on the 1-minute.

Stop losses and profit targets tend to be larger than on the 1-minute chart. Positions sizes are smaller than those on a 1-minute chart because candles are bigger on the 5-minute chart which means likely a greater distance between the chosen entry and exit.

Because position sizes are a bit smaller than the 1-minute chart, traders may be able to have multiple positions at the same time. Again, you can always allocate a specific amount to each day trade to assure there is enough capital for all the positions you wish to take.

Main takeaway : the 5-minute chart is for people who want to focus on larger intra-day movements, receiving fewer data points, with moderate positions sizes smaller than 1-minute, larger than higher time frames. The chart examples, which show example trades on the same day, but on different time frames, are not meant to say one is better than the other. They just highlight some of the differences screen time, number of trades, size of stop losses and profits.

A or minute chart time frame is for someone who wants to see the major trends and movements throughout the trading day, not each little gyration 5-minute, and to a greater extent the 1-minute. Traders on this time frame may only be taking one or two trades a day. If only trading during a two-hour or less window, many days may have no trade signals.

Trading this time frame may require more time in front of the screen since it takes longer to get into and out of trades. Stop losses and profit targets tend to be larger than on the 5-minute chart. Positions sizes are smaller than those on a 5-minute chart because candles are bigger on the 10 or minute chart which likely means a greater stop loss distance. Main takeaway : the 10 or minute chart is for people who want to focus on the large price movements throughout the day.

They prefer cleaner movement and are likely after only one or two trades over multiple hours of trading. Some traders only trade on one time frame, while others use multiple time frames to produce trading opportunities. When trading a single time frame, if you see a trade on that time frame you take that trade. No need to check other time frames for confirmation. Multiple time frame trading means you look at a longer-term chart and use it as a filter for trades on the lower time frame.

In this case, a trader may check the 5-minute or minute for the overall trend direction, and then look for opportunities to enter in that trend direction on the 1-minute chart, for example. Or they may use the minute chart for overall direction and then use the 5-minute or minute chart to enter, as another example. Below is minute chart of Draftkings DKNG on the left, and a 5-minute chart on the right. The minute provided a potential trade setup, then the 5-minute was used to find an entry, and stop loss.

There is no perfect combination or answer. A winning system can be built on any time frame, or any combination of time frames.

But understanding the pros and cons will hopefully help you decide which is best for YOU. Time frames are often discussed as if they are the only charting option. They are not. There are chart types based on things other than time. Tick charts are based on a fixed number of transactions. A bar completes once there have been a certain number of transactions.

This means during busy times bars may form quickly, but during quiet times it may take many minutes or even hours for a bar to form. I like using these when I trade futures contracts. Renko charts are bricks that form once the price has moved a certain amount. They keep forming as the price moves in the same direction and by the required amount.

If the price reverses the equivalent of two brick sizes, the bricks change color and start moving in the other direction. The bricks are not based on time but rather price movement. For forex day trading I use the 1-minute chart, only. For stock day trading I use the 1-minute chart, only. For swing trading stocks I use the daily chart, only.

For swing trading currencies I will look for patterns on the 4-hour and hourly charts, and then if I find one I like, I will drop down to a five-minute chart to find my entry and really maximize my reward:risk stop loss based on 5-minute chart and target based on 4-hour or hourly chart, whichever one was used.

I also use renko charts for another strategy. Interested in learning how to crush the EURUSD in two or less a day can also trade longer?

The EURUSD Day Trading Course has more than 20 hours of strategies, tactics, exercises, and mental work to get you trading in top form. Disclaimer: Nothing in this article is personal investment advice, or advice to buy or sell anything. Trading is risky and can result in substantial losses, even more than deposited if using leverage.

Cory is a professional trader since In between trading stocks and forex he consults for a number of prominent financial websites and enjoys an active lifestyle. He runs TradeThatSwing and coaches individual clients. Thanks for the information and knowledge shared. it is very helpful and has answered most of my questions concerning, position size, being liquidated too early as a result of my time frame used, and even given me a more best time frame favorable to me and the amount of money to start with.

I blew my account in just 10 minutes all because I used high leverage of 20X with a small position size on the 15 minutes time frame. I count myself as a day trader. Thanks very very much. I am A FX Trader. Sir if I want to Know H1 Timeframe Trade.

Pls Help to me. It depends what time of day you want to trade, how long you want your trades to last, how many trades you want on average in a day or month, for example.

Apply different moving averages to your chart, and see which works best for the time of day you can trade. Thanks for sharing your knowledge on this topic. Very useful information. What would be the maximum number of lots one can trade this way? On my level II I there is usually lots at each fractional pip. So trading up to 50 5million lots is about 0. My problem is I confuse timeframes.

For example I enter on 15 and 1 hr. Trade was in profit for a while then the 1 he candle started retracing. Do I get out of trade based of lower timeframe? That trade really messed me up. There is no perfect solution that will work for everyone. Look through all your or potential trades that used this method ideally 50 or more and see which exit method was most profitable. For myself, if I am using two timeframes, I use the larger one for overall direction, then I use the lower time frame for finding the exact entry point and stop loss.

Then I use the larger time frame to establish my profit target. That way my risk is typically small based on the smaller time frame, but my potential profit is large based on the larger time frame.

This is want you want as a trader. Necessary cookies are absolutely essential for the website to function properly. Dialog Heading. The most traded currencies in the world include the U. During the European session, the EUR, GBP, CHF and ZAR are more active.

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