Best Time to Trade – a Professional Insight
London Session Insight
Prep-hours (1:00am – 3:00am EST) – time before London opens. Preparations start way ahead of the actual opening. Large banks, institutions and professional investors of all levels enter London Open fully set.
What is being analysed in prep-sessions are the results of the preceding sessions. In this case, Asian session sets the mood & pace, while London/New York session bundle sets the trend:
- If the Asian session was mostly consolidating and calm (usual pattern), then expect breakouts and visible price shifts upon London Open.
- If the Asian session has seen some volatility (unusual pattern), then knowing it is the least active session in Forex trading, London would start on the cautious note, possibly consolidating or retracing for a while, before unleashing the volume. There will also be less consensus among traders about the short-term trading strategies and key support/resistance levels.
London Opening hours (3:00am – 5:00am EST) — as the session opens, volume rises, market activity picks up and trends start to form.
Beware of notable price corrections (counter-trends) taking place in the very beginning – believed to be caused by deep liquidity powergrabs, they trigger out vulnerable stops and set a better entry price for themselves during early hours – then the market returns to its main trend as usual.
London Closing hours (10:00am – 12:00 noon EST) – despite the London session end, volume keeps rising ever so stronger. This is a result of overlapping hours between London and New York trading sessions. Trading continues, and sees no slowing-down between these hours.
New York Session Insight
Prep-hours (6:00am EST – 8:00am EST) — seeing clean trends and price patterns formations during these hours, means time to act is now, even before the New York session opens:
- Once the New York opens on a high trend note, it is sure to continue that way. Those who missed the train, might find it harder to find a good entry at that point.
- If, however, the London hours have seen rather consolidating behaviour, and this continues into the Prep-hours of New York session, then the best time to trade will come with the New York Open – the price is expected to break out of the range as the session begins.
New York Opening hours (8:00am – 9:00am EST) — breakouts out of consolidations are often on the menu, plus the whole market analysis of the London session is now unfolding in new daily strategies – Fibonacci, Pivots, trend lines, divergence and common price patterns — everything comes to fruitful implementation.
New York Closing hours (3:00am — 5:00pm EST) — volume literally dies down to a trickle, and closer to 5pm there is nothing to trade 99% of the time.
Asian Session Insight
Prep-hours (5:00pm – 7:00pm EST) – often carry out on the lowest volume.- This is time to revise & analyse the results of the previous day, and set goals for the new one.
Asian Opening hours (7:00pm – 8:00pm EST) – usually continue in consolidation at least until the trading in China opens up at 8:00pm EST to bring in some volume, but once the initial influx is over, the volume starts to die off slowly as the session hours progress. This is the best time to pause trading or switch to higher time frames, such as 4H and Daily to analyse major trends for the new day.
Asian Closing hours (2:00am – 3:00am EST) — lightly overlapping with the start of the largest market session — London trading session – the market sees signs of awakening as Asia closes for the day. The large banks and other market participants are layering up orders in preparation for upcoming active trading hours. And at 3:00am EST the cycle starts all over again with the London Open.
To your trading success!
Jeff Boyd
