The forex market is open and active every day of the week, as you surely already know. Although traders can access trading platforms anytime to transfer money, this does not imply that they should be trading continuously.
Timing is essential when trading forex because there are always favorable and unfavorable times to trade. The best times to trade forex, along with periods when it would be wise to avoid the market so that you only change when it is most advantageous.
Frequently Traded Forex Currency Pairs
The most popular currency pairings frequently traded by international the forex traders on the best forex trading platform for beginners should also be known, in addition to the most popular trading windows to time forex deals. You’ll be able to include these well-known currency pairings into your trading strategy and comprehend their price movement relative to other trading partners on the market more successfully the more familiar you are with them.
Among the most well-liked currency combinations are:
EUR/USD. This is the most common forex pairing in terms of volume, and the two currencies involved stand for the two biggest economies in the world.
The EUR/USD is a well-liked safe haven pairing when traders want to shift money out of volatile positions because of its enormous size and liquidity, which makes it steadier than other currency pairs with lower liquidity.
USD/JPY. USD/JPY is an excellent option for traders looking for a safe-haven pair with exposure to eastern markets. It provides good liquidity and stability and can be more insulated from economic shocks affecting western economies than the EUR/USD. However, due to its position in Asia, this combination may be more affected by news and events regarding the economy in the East.
GBP/USD. The British Pound and the Euro have become somewhat more separated due to Great Britain’s exit from the European Union, which has increased volatility and provided opportunities for diversification and profit-seeking. Although GBP/USD has always been a significant currency pair in terms of popularity, volume, and the economies the currencies represent.
EUR/GBP. Despite the absence of the USD, EUR/GBP is still significant and has the potential to be profitable for traders, especially in light of Brexit and the growing economic distance between these two currencies. Britain and Europe’s political and economic differences have boosted this currency pair’s volatility and trading volume, appealing to traders who want to time their positions around changing news and events.
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Why Timing the Market Is Difficult
The secret to profitable forex trading on the best forex trading platform for beginners is timing. But it’s far easier said than done to time the market. If you’ve ever traded on a traditional stock market, trying to schedule trades to take advantage of discounts and recessions almost always costs you money in the long term. Although these price changes and corrections are unavoidable, their timing is not always expected.
No trading method is perfect, but it can help you estimate the timing of these trades with some degree of precision. Numerous factors can influence price movement and the timing of those moves, and while some—like dependable chart patterns and government-issued economic reports—might be simpler to monitor and trade around,
However, others, such as breaking business or economic news or abrupt shifts in trader emotion, can be difficult or impossible to foresee.
Are Particular Times of Day Favor Trends or Ranges?
This subject is crucial for all traders since, depending on your trading approach, the best or worst times to enter trades may depend on whether the price tends to trend better or worse at a particular time of day.
Depending on what time of day (London time) the breakouts occurred, we may compare what transpired typically in the four hours following a 50-day flight in any of the three major Forex currency pairings.
This leads us to conclude that, at around 4 pm London time, and 8 am, respectively, traders intending to trade with the trend had the best opportunity of experiencing the most substantial price movement immediately. The optimal hours for range trading are probably between 8 pm and midnight.
Even if paying attention to the day of the week, month, or time of day isn’t going to be a successful Forex trading strategy in and of itself, statistical tendencies based on these timings have been found that you can utilise to increase the edge of a successful trading strategy.