When trading on the currency exchange, you should consider many factors. Timing is very important for successful trading. Forex is open 6 days a week (except Sunday and public holidays, when major banks are usually closed). But which time of the day is best to trade? There’s no such thing as “day” or “night” on the currency exchange. It works 24/7, which allows the trader to choose a convenient time for Forex trading. However, you should take into account the fact that the market activity is different in different time periods.
Currency pairs and trading hours in Nigeria
Forex broker/trader must have a deep understanding of the currency pairs and choose the most popular ones. Most users trade euro (EUR), dollar (USD), and Japanese yen (JPY). The most traded currency pair in Nigeria is EUR/USD. Considering its high popularity, brokers usually offer the lowest spread (the difference between the bid and the ask prices) for it. The volatility also attracts many traders who want to make money on the sharp price movements.
Experts say that the best Forex trading sessions in Nigeria time is between 14:00 and 18:00 local time. During these four hours, two of the largest trading sessions, London and New York, overlap, which provides maximum liquidity and high trading activity.
How to choose the best time frames for trading: 5 important tips
Forex, stock, commodity, and other markets show different activity in different time. This means that while in the first 3-4 hours after the opening of the exchange, you can observe a steady formation of trends, in another time, they weaken and even fade. Therefore, the strategy that worked like an hour ago may not work when you need it.
Therefore, each trader must choose the optimal trading time, as this factor significantly affects the possibility of obtaining profits. It’s easy to do- just follow a few practical tips:
- Consider the features of your trading strategy. Almost all systems are tailored to trend trading. Therefore, you need to choose the period when the market is most volatile (volatility is the standard deviation of a market).
- Taking into account your own schedule. Some people find it easier to trade early in the morning, while others do it before or after work.
- Avoid starting the deals immediately after the opening of the session or 1-2 hours before its closure. At this moment, the volatility is unpredictable, and many trends prove to be false. Besides, a few hours before the closing time, a flat is often observed (the price moves in a very narrow corridor).
- It is not recommended to trade on the days when American or British banks have holidays. Therefore, it is important to consult an economic calendar, which contains the list of public holidays in different countries.
- And another useful tip: each asset has the highest volatility during the specific session. For example, the currency movements of the euro (against all currency pairs) can be expected during the European session and the Japanese yen – during the Pacific one.
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