What Are the Best Times to Trade for Individual Currency Pairs?

The foreign exchange market operates 24 hours a day and as a result it
is impossible for a trader to track every single market movement and
make an immediate response at all times. Timing is everything in currency
trading. In order to devise an effective and time-efficient investment
strategy, it is important to note the amount of market activity around the
clock in order to maximize the number of trading opportunities during a
trader’s own market hours. Besides liquidity, a currency pair’s trading
range is also heavily dependent on geographical location and macroeconomic
factors. Knowing what time of day a currency pair has the widest or
narrowest trading range will undoubtedly help traders improve their investment
utility due to better capital allocation. This chapter outlines the
typical trading activity of major currency pairs in different time zones to
see when they are the most volatile. Table 5.1 tabulates the average pip
range for the different currency pairs during various time frames between
2002 and 2004.


ASIAN SESSION (TOKYO): 7 P.M.–4 A.M. EST

FX trading in Asia is conducted in major regional financial hubs; during the
Asian trading session, Tokyo takes the largest market share, followed by
Hong Kong and Singapore. Despite the flagging influence of the Japanese
central bank on the FX market, Tokyo remains one of the most important