September 12, 2025
US consumer inflation largely fell in line with expectations yesterday, with the headline year-over-year figure coming in at 2.9%. The bigger surprise came in the form of producer inflation the day prior, which showed PPI falling into negative territory at -0.1%, meaning that wholesale prices actually dropped in August. The long and the short of it is that the Federal Reserve has a pretty straightforward path to a 25-bps rate cut next week. A sudden spike in inflation figures may have stayed the Fed’s hand, but as it stands the risk of doing nothing outweighs the risk of looser monetary policy. The prospect of a greater reduction in rates appears to be off the table for the time being, although markets are pricing in a total of 75-bps in rate cuts before the end of the year.
Stocks markets are breaking records like it’s going out of fashion. From the US to Asia, indices around the world continued to hit fresh highs yesterday. In the US, the Dow Jones Index smashed through 46,000 for the first time in its history, while the Nasdaq Composite secured an accolade of its own by closing above 22,000 points. No significant milestones for the S&P 500 but the index also closed at record highs on Thursday. This morning in Asia, the major indices in Japan, Hong Kong and Korea are all currently sitting at all-time highs as well.
Momentum has shifted from gold to silver. While the former remains at all-time highs at around $3,650 per ounce, the latter has shifted up a gear and is now sitting comfortably above $42. We haven’t seen such prices in well over a decade and some investors are beginning to ask whether silver will soon break its long-standing record high of $49.95, established all the way back in 1980. Accounting for inflation the precious metal is still obviously way off par but the numerical milestone remains significant nonetheless. Following the rise in gold and silver, attentions are understandably shifting to cryptocurrencies and sure enough, Bitcoin has perked up a little over the past couple of sessions. $115k is the current valuation but once again Bitcoin dominance continues to slide, meaning the broader alt market is faring better. One to watch.
The forex market holds massive potential for those who learn to trade it wisely. But for Forex trading for beginners, understanding what forex is, and what affects your trades is the first step.
Currencies move fast, and strategies can fail without a solid foundation. If you’re new to this world, think of it as learning how to swim: jumping straight into the deep end without knowing how to float rarely ends well.
In this beginner’s guide, you’ll learn how to start trading forex the right way, avoid common pitfalls, and maybe even save yourself from a few unnecessary headaches along the way.
At its core, the foreign exchange (forex or FX) market is where one currency is exchanged for another. Every trade involves buying one currency while selling another, like swapping your local currency notes for another currency notes at the airport, only on a global scale and with trillions of dollars moving daily.
Key features of the forex market:
For beginners, it’s important to know that the forex market isn’t just one single place, it’s made up of different parts where trades happen:
Since forex is a 24-hour market, it’s broken into four main sessions. These sessions overlap, which is where the fun (and volatility) really begins.
Forex Session
|
Session Time (Standard/Winter GMT)
|
Session Time (Daylight/Summer GMT)
|
Notes
|
|---|---|---|---|
| Asia (Tokyo/Hong Kong/Singapore) | 00:00 – 09:00 GMT | 00:00 – 09:00 GMT | No DST, same all year |
| Europe (London) | 08:00 – 17:00 GMT | 07:00 – 16:00 GMT | DST shifts 1 hour earlier |
| North America (New York) | 13:00 – 22:00 GMT | 12:00 – 21:00 GMT | DST shifts 1 hour earlier |
Session Overlaps
Overlap
|
Time (Standard/Winter GMT)
|
Time (Daylight/Summer GMT)
|
|---|---|---|
| Europe + North America | 13:00 – 17:00 GMT | 12:00 – 16:00 GMT |
| Asia + Europe | 08:00 – 09:00 GMT | 07:00 – 08:00 GMT |
Tip: The London-New York overlap is the most active a prime hunting ground for traders.
Read more：Best time to trade forex: When to enter the market during the day
So, how do people actually make money trading forex? In simple terms, traders aim to buy low and sell high (or sell high and buy low). If you buy GBP/USD expecting the euro to strengthen against the dollar, you’ll make a profit if that happens, but you’ll lose if it goes the other way.
Forex trading for beginners can seem complicated initially.
Here are seven golden rules every new forex trading beginner should keep in mind:
Here’s a practical step-by-step guide to help you move from “what even is forex?” to making your first trade:
Good news: you don’t need a fortune. Many brokers let you open accounts with as little as $50-$100. But realistically though, starting with at least $500–$1,000 gives you more breathing room. The key is not the amount you start with, but how you manage your capital.
Every trader eventually finds a strategy that fits their personality. Here are a few of the most popular:
At first glance, forex trading looks simply: buy when it’s going up, sell when it’s going down. Easy, right? Not exactly. The reality is forex markets are fast-moving, unpredictable, and full of hidden traps.
Forex trading for beginners – the main challenges are:
Fast-Moving Markets
Prices can change in seconds. A trade that looks great one moment can collapse the next.
So, how do you stay sane and avoid being eaten alive by the market?
Every field has jargon, and forex is no exception. Here are some of the most common terms you’ll come across:
Term
|
Definition
|
Example
|
|---|---|---|
| Pip | The smallest price moves in forex - 0.0001. | EUR/USD moves from 1.1000 to 1.1001 = 1 pip. |
| Lot | Standard trade size (100,000 units). Mini and micro lots are smaller. | A 1 mini lot trade = 10,000 units. |
| Spread | The difference between the buy and sell price. | Broker quotes EUR/USD at 1.1000/1.1002 → spread = 2 pips. |
| Leverage | Borrowing money from a broker to trade bigger positions. | 1:50 leverage = $100 controls $5,000. |
| Margin | The amount of money required to open a leveraged trade. | $100 margin to control a $5,000 trade. |
| Stop-Loss | An order that closes your trade at a set loss. | Buy EUR/USD at 1.1000, stop-loss at 1.0950. |
| Take-Profit | An order that closes your trade at a set profit. | Sell GBP/USD at 1.3000, take-profit at 1.2900. |
| Volatility | How much and how quickly price moves. | GBP/JPY = highly volatile, EUR/USD = calmer. |
| Liquidity | How easily you can enter/exit trades. | EUR/USD is highly liquid. |
Charts are a trader’s best friend they show how price moves over time. Here are the most common types:
Read more:Top forex brokers to trade with in 2025
Forex is risky by nature but with the right precautions, you can protect your account.
Read more:How to select the best analysis method for forex trading success
Radex Markets offer:
Read more:Effective risk management in FOREX
Think of leverage as hot sauce: a little adds flavour, too much and it ruins the dish. Stick to lower leverage until you gain experience.
Economic news like Non-Farm Payrolls (NFP) or interest rate decisions cause huge spikes. Beginners often get burned by trading during these times. Watch and learn during these times.
Read more:Forex news
Read more:ECONOMIC CALENDAR
A: Yes, if you treat it as a skill to learn, not a get-rich-quick scheme.
A: It varies. Most traders take months (or even years) of practice before becoming consistently profitable.
A: Not at the very start, but you’ll need at least basic chart-reading skills to progress.
A: The London–New York overlap (12:00-16:00 GMT in summer) is the most active market time.
Read more：Best time to trade forex: When to enter the market during the day
A: Start with free guides, demo accounts, and reliable resources - not social media “gurus.”
Read more:Forex news
Yesterday, the Bureau of Labour Statistics released its annual non-farm payroll revision, covering the period between March 2024 and March 2025. The report estimated that 911 thousand fewer jobs had been added to the US economy during that time frame than initially stated. Put differently, previous NFP reports overestimated new jobs by 76 thousand per month on average, meaning the slowdown in the US labour market has been going on for far longer than previously thought. Upon hearing of the scale of the revision, VP Vance chimed in with “it’s difficult to overstate how useless BLS data has become”. As if it were needed, the updated NFP figures put further pressure on the Fed to lower rates in a bid to stimulate the US labour market. The odds of a 50-bps cut remain minimal according to FedWatch, so it looks like markets are gearing up for a mere 25-bps during next week’s meeting.
The widely expected rate cut is doing wonders for markets around the world. Gold convincingly broke through $3,600 per ounce on Monday and initially rose even higher during yesterday’s session, reaching towards $3,675 at one point before cooling off for the day. The precious metal is showing renewed vigour once again this morning and is already up half a percent at the time of writing.
The record-breaking streak in bullion prices was matched by stock market gains around the world yesterday. In the US, the Dow Jones, S&P 500 and Nasdaq Composite all closed at record high levels; in Hong Kong, the Hang Seng index reached a new peak and pushes higher still this morning; finally in Japan, the Nikkei 225 broke new ground above 44,000 points during yesterday’s session for the first time in its history.
In cryptocurrencies meanwhile, nothing appears to be happening. Bitcoin remains comfortably above $100k but has shown little inclination to move higher despite the prospect of a rate cut. Bitcoin dominance however is showing signs of weakness, allowing the alt market some breathing room to expand.
US PPI data drops in a few hours, followed by CPI data tomorrow. Neither is expected to show much progress on the inflation front, which remains stubbornly above the Fed’s 2% target. Headline inflation is expected to reach 2.9% according to Thursday’s CPI report but should the actual figure overshoot predictions it may complicate the Fed’s path forward. Should inflation continue to push higher it will no doubt limit the central bank’s willingness to loosen the monetary tap.
A few years back, Hollywood gave us the movie Next, starring Nicolas Cage, who could see ten minutes into the future. Handy if you’re trying to stop an international terrorist attack, but downright lethal if you’re trading forex. With that kind of superpower, you wouldn’t just be profitable; you’d probably break the global financial system within a week.
Sadly, unless you’ve got Nostradamus in your family tree, predicting market prices with that level of accuracy will forever remain the stuff of dreams (and questionable Hollywood scripts).
But traders have never been people to give up easily. If we can’t see into the future, we’ll happily build machines that try to. Enter the latest quantum leap in technology: artificial intelligence (AI).
AI has already stormed into our daily lives — recommending the shows we binge, correcting our spelling mistakes (sometimes incorrectly), and answering our questions at the speed of light. It is no surprise then that traders are now asking: ‘Can AI help me beat the forex markets too?’
Once upon a time, forex trading meant staring at candlestick charts until your eyes watered, drawing mysterious lines across them, and convincing yourself you had found the “secret pattern” that nobody else in the world had ever spotted. Spoiler alert: you hadn’t.
Then came the era of algorithmic trading and expert advisors (EA’s); pre-programmed rules that could buy and sell on your behalf. These “algos” were basically glorified to-do lists for computers: “If EUR/USD hits this price, buy. If it drops that far, sell. If it does neither, do nothing.” The good EAs worked well enough, but they still rely entirely on human logic and human programming. Many EAs are still used today by traders around the world.
Fast forward to today, and we’re watching the birth of something far more sophisticated: AI-powered trading. Unlike those early algos, AI doesn’t just follow instructions — it learns, adapts, and sometimes makes decisions its human creators can’t fully explain.
Hedge funds and investment banks were the first to jump all over this shiny new toy. With deep pockets, supercomputers, and clever PhDs running around, they started building AI systems that could crunch mountains of data faster than you can say “spread betting.” From economic reports to social media posts, AI now has the ability to digest more information in a second than a human trader could in a lifetime of Red Bull-fuelled all-nighters.
Of course, as with all things in finance, what the big players use tends to trickle down to retail traders sooner or later. Trading platforms are already experimenting with AI-driven bots, pattern recognition tools, and even sentiment analysers. The question is no longer “Is AI coming to forex?” but rather “How soon before it becomes as common as the moving average indicator?”
Advantages of AI in forex trading
If there’s one thing traders love, it’s an edge. And AI comes loaded with shiny new edges, like a new flying car designed by Elon Musk. Let’s explore the advantages of AI:
1. Speed & efficiency
AI can scan hundreds of charts, analyse historical data, and spot patterns faster than you can say “take profit.” While a human trader might spend hours poring over a GBP/USD chart, AI can check the entire forex market in seconds and still have time to order itself a metaphorical flat white.
2. 24/7 trading
Humans need to sleep, eat snacks, and the occasional Amazon prime binge to stay sane. AI, on the other hand, doesn’t care if it’s 3 a.m. in Japan or lunchtime in London. It can monitor the markets continuously, catching opportunities while human traders are busy wondering about what to have for lunch.
3. Data processing power
AI thrives on data, the more it gets, the better. It can crunch not only price charts but also economic reports, central bank speeches, and even the mood swings of Twitter (or X, depending on how old you are). This ability to factor in multiple streams of information gives AI an analytical depth that would take a human a lifetime to match.
4. Reduced emotion
Let’s face it: emotions are the Achilles’ heel of many traders. Fear, greed, and revenge-trading have destroyed more accounts than bad internet connections. AI, however, doesn’t feel a rush of adrenaline when it sees a big candle forming. It simply follows its data-driven models, calmly placing trades without any squeaky bum moments.
5. Consistency
AI doesn’t get bored, distracted, or suddenly decide to “just wing it.” Once trained, it applies its logic consistently, which can remove the wild swings that often comes with human decision-making.
In short: AI is like the disciplined trader we all wish we were — fast, tireless, data-hungry, and immune to panic.
The limitations of AI in forex trading
You might be asking yourself by now, ‘why am I even bothering to trade in the traditional way, why not just AI take over?’ Before we crown AI the king of forex trading, we should take a sobering look at its flaws. Because while AI is clever, very clever indeed, it’s not exactly infallible and sometimes, it’s as clueless as a tourist trying to read a London Tube map for the first time.
1. The black box problem
All AI models, especially the complex ones, often can’t explain how they reach their own conclusions. That’s comforting when you’re asking it to recommend a great place to eat out… but less so when it’s risking your hard-earned cash. If your AI bot loses ten trades in a row, don’t expect it to lean back and say, “Well, here’s where I went wrong.” More likely, it’ll just sit there smugly, convinced it’s still right.
2. Market unpredictability
AI loves patterns — it thrives on them. The problem? Markets don’t always behave predictably. Black swan events like wars, pandemics, or surprise political tweets can blow even the smartest algorithm out of the water. AI may know how EUR/USD usually reacts to a U.S. jobs report, but it’s less equipped to handle Trump announcing he’s invaded Greenland “as he likes Polar Bears.”
3. Accessibility and cost
The best cutting-edge AI systems live in the exclusive world of hedge funds and big banks, guarded by PhDs and expensive security hardware. Retail traders often get watered-down versions. Think of it like buying instant coffee while the pros sip freshly ground Columbian espresso. It works, but it’s not quite the same.
4. Dependency risk
There’s also a real danger of traders becoming overly reliant on AI. If you let the machine do all the thinking, you risk losing your own trading skills. And let’s be honest; if your Wi-Fi crashes and your AI bot goes silent, would you actually know what to do? Or will you just sit there staring at your screen, praying for your robotic overlord to return?
5. Human intuition still matters
AI is great at crunching numbers, but it doesn’t have a human “gut instinct.” It can’t read between the lines of a central banker’s speech, sense the tone of a geopolitical headline, or notice that the big gold traders suddenly look nervous. Sometimes, even with all the available resources AI has, the human touch still has the edge.
Bottom line: AI may be powerful, but it’s not magic. It is a tool; and like all tools, it’s only as good as the person who using it.
Human vs. AI: Who wins?
Picture this: On one side, you’ve got the AI — the data-driven genius with perfect recall, lightning reflexes, and zero sense of humour. On the other, you’ve got you, the human trader, a bit scrappy, emotional, sometimes reckless, but streetwise with a pretty reliable gut instinct. Together, you’re either going to clean up in the markets… or blow your trading account to pieces.
What AI brings to the table
What humans still do best
The truth is, asking who wins — humans or AI — is a bit like asking whether Doc or Marty McFly is the real hero. The answer is that they work best together. AI can filter the noise, crunch the data, and provide signals. Humans can bring judgment, context, and the ability to say, “Actually, maybe don’t short the dollar five minutes before this month’s NFP data.”
In other words: AI plus human trader equals a potentially powerful duo, if we remember who’s driving the DeLorean (hint: it should be you, not the bot, not just yet anyway!).
The future: Where is AI taking forex trading?
If history has taught us anything, it is that traders will adopt any new gadget that promises even the slimmage of edges — whether it’s Fibonacci spirals, crystal balls, or that one lucky pair of pants. You can bet your bottom dollar that AI isn’t just a passing fad in forex; it’s here to stay. The real question is: what will it look like in the future?
1. Smarter, faster, and more accessible
We are likely to see AI trading tools become more powerful and more widely available. The hedge funds and big banks may still hoard the fanciest new toys, but retail platforms are catching up fast. In a few years, it could be as common to plug an AI bot into you’re your chart window as it is to slap on a 200 Moving Average.
2. AI that understands context
The dream is AI that doesn’t just crunch numbers but also understands context. Imagine a system that can read a central banker’s speech, detect the subtle nervous coughs, and say, “Yep, rates are definitely coming down.” That’s where natural language processing (NLP) and machine learning are heading. It won’t be Nicolas Cage seeing 10 minutes ahead, but it might get close enough to be super scary.
3. Regulation and responsibility
Of course, with great power comes… great regulatory headaches. If your AI bot accidentally causes a flash crash, who’s responsible? You? The AI developer? The robot itself? Regulators are already scratching their heads on this one, and we can expect stricter rules as AI becomes more common in trading.
4. Human + AI partnerships
The most realistic future isn’t AI replacing traders but AI supporting traders. Maybe think of it as your wing man: crunching the data, flagging the risks, and leaving the final decision to the human in charge. The best traders of tomorrow may not be the ones who reject AI outright, but those who learn to work with it.
5. Will AI replace traders entirely?
Unlikely. After all, the markets are driven by humans; their fears, hopes, politics, and unpredictable behaviour. AI can analyse patterns, but human chaos is much harder to code. For better or worse, traders will probably still be around, arguing on Instagram and blaming their brokers when things go wrong.
The future? AI will almost certainly play a bigger role in forex trading, but don’t worry, it’s not about to kick you out of your chair just yet. More likely, it will slide up next to you, whisper some data-driven advice, and then let you make the shot.
In conclusion
Will AI be the future of forex trading? Inevitably, yes. It’s fast, tireless, immune to emotional meltdowns, and capable of digesting more data in a second than most traders could in a lifetime. It’s already reshaping the way hedge funds and banks trade, and retail traders are quickly catching up.
But let’s not kid ourselves. AI is not a magical crystal ball. It struggles with unpredictable events, it doesn’t have human intuition, and it can’t yet read the subtle smirk of a central banker who’s about to drop a policy nuke. The smartest traders of the future won’t hand over the wheel entirely they will use AI as a powerful wing man while keeping their own hands firmly on the controls.
In other words: AI may be the Ferrari of forex trading, but you’re still the one in the driver’s seat. If you treat it as a tool and not as a magical money machine — it might just help you navigate the winding road of the forex markets with fewer crashes and maybe even earn you a few extra pips in your pocket.
And if all else fails? Well, you can always go back to watching Nicolas Cage movies and dreaming about seeing ten minutes into the future. It’s cheaper, less stressful, and the snacks are not bad either.
Last Friday’s NFP release all but confirmed that we are getting a rate cut during next week’s FOMC meeting. 75 thousand new jobs were expected in August, but the latest report revealed that the actual figure was in fact only 22 thousand. Before the latest jobs numbers, interest rate traders were already leaning heavily in favour of a 25-bps cut, but after Friday’s data drop, market participants are now entertaining the possibility that the Fed will commit to a stronger move and slash rates by a full 50-bps instead. Whatever the size of the cut, monetary easing is around the corner.
Despite the abysmal employment figures, the reaction in US stocks was relatively muted. The S&P 500 and Dow Jones lost modest amounts while the Nasdaq ended the day almost flat. The Dollar lost around half a percent against major currencies but once again, nothing significant. Precious metals hosted the bulk of the drama last Friday, which saw gold briefly reach up to a record-breaking $3,600 per ounce. The metal opened high this morning and is currently deliberating on its next course of action. The move into gold is a global phenomenon, fuelled by rate cut expectations on the Dollar, but perhaps more generally by a growing sense of uncertainty within financial circles. Countries around the world continue to stockpile precious metals, with the Chinese central bank adding to its reserves for the tenth consecutive month.
There may yet be some twists and turns in the road before next week’s interest rate decision. The first arrives tomorrow in the form of the non-farm payrolls annual revision, a more comprehensive data set which includes tax records and is considered more accurate than the usual monthly reports. Last year’s revision slashed 818 thousand jobs from the annual figure, from 2.9 million jobs initially – a 30% correction. A similarly significant report tomorrow may paint a different picture of the US labour market entirely. Things complicate further on Wednesday with August PPI figures and again on Thursday with the latest batch of CPI data. The two reports will provide the newest information about inflationary pressures in the US and may factor into the Fed’s next move. A poor labour market coupled with higher inflation is not a situation any country wants to be in and leaves the central bank with difficult decisions to make. In Europe meanwhile, the ECB is expected to maintain rates steady on the Euro at 2.15% on Thursday.
Geopolitical events could provide some entertainment in financial markets this week as France’s Prime Minister faces a confidence vote later today which he is fully expected to lose. The French economy boasts one of the highest debt-to-GDP ratios in the world and yields on French bonds continue to rise. The Japanese Prime Minister meanwhile resigned yesterday, potentially paving the way for an advocate of greater looser fiscal policy to take up the mantle. Either way the path forward for the Bank of Japan remains a complicated one.
The Forex market is the largest financial market in the world where currencies are bought and sold. With a daily trading volume exceeding $6 trillion, it's a global network of banks, financial institutions, and individual traders exchanging currencies.
The Forex market is characterised by its high liquidity, 24-hour trading availability (5 days a week), low transaction costs, and the ability to trade with leverage. These features make it accessible to traders of all levels, from beginners to professionals.
By understanding optimal Forex trading hours, traders can not only maximise their profit potential but also establish a more balanced trading routine. Knowing when markets are most active allows for strategic planning of trades without sacrificing your sleep or personal time.
The global Forex market offers numerous opportunities across different trading sessions. Here's what you need to know about the major market hours:
While Forex trading is often described as a 24-hour market, it's important to understand that trading activity varies significantly throughout the day. The market opens each week on Sunday at 5 PM EST when Sydney begins trading, and closes on Friday at 5 PM EST when New York ends its session.
Here is a table that summarises the forex market trading hours:
Forex session |
Session time (Standard/Winter GMT) |
Session time (Daylight/Summer GMT) |
Notes |
|---|---|---|---|
| Asia (Tokyo/Hong Kong/Singapore) | 00:00 – 09:00 GMT | 00:00 – 09:00 GMT | No DST, same all year |
| Europe (London) | 08:00 – 17:00 GMT | 07:00 – 16:00 GMT | DST shifts 1 hour earlier |
| North America (New York) | 13:00 – 22:00 GMT | 12:00 – 21:00 GMT | DST shifts 1 hour earlier |
Overlap |
Time (Standard/Winter GMT) |
Time (Daylight/Summer GMT) |
|---|---|---|
| Europe + North America | 13:00 – 17:00 GMT | 12:00 – 16:00 GMT |
| Asia + Europe | 08:00 – 09:00 GMT | 07:00 – 08:00 GMT |
The New York session runs from 8:00 AM to 5:00 PM EST (13:00-22:00 GMT in winter). As the financial capital of the world's largest economy, this session sees significant trading volume, especially for USD pairs.
During this session, major US economic data is released, including employment figures, GDP reports, and Federal Reserve announcements, which can create substantial market movements.
The New York session has a profound impact on the forex market as it overlaps with the London session, creating the highest liquidity and trading volume of the day. This overlap period is ideal for trading major pairs like EUR/USD, GBP/USD, and USD/JPY.
The Tokyo session operates from 7:00 PM to 4:00 AM EST (00:00-09:00 GMT). As Asia's financial hub, it features significant trading in JPY, AUD, and NZD currency pairs.
This session is characterized by lower volatility compared to London and New York, but still offers excellent opportunities for range trading strategies. Important Japanese economic releases, Bank of Japan policy decisions, and regional economic data from China and Australia influence market movements during these hours.
The Tokyo session is particularly important for traders focused on Asian currencies and those looking to capitalize on carry trades involving the Japanese yen.
The Sydney session runs from 5:00 PM to 2:00 AM EST (22:00-07:00 GMT), making it the first major market to open each week. Trading during this session typically focuses on AUD, NZD, and JPY pairs.
While liquidity is lower compared to other major sessions, the Sydney open can set the tone for the trading week, especially after weekend news or events. The Australian economy's strong ties to commodity markets and Asian economies make this session important for traders interested in these sectors.
The Sydney session overlaps with the Tokyo session, creating increased liquidity for trading Asia-Pacific currencies during these hours.
The London session operates from 3:00 AM to 12:00 PM EST (08:00-17:00 GMT in winter). As Europe's financial center, London accounts for approximately 35% of all forex transactions globally.
This session features high volatility and liquidity, especially for EUR, GBP, and CHF pairs. Major economic releases from the UK and European countries, along with European Central Bank and Bank of England announcements, create significant trading opportunities.
The London session is considered by many professional traders to be the most important trading session, as price action during these hours often establishes key trends that continue throughout the day.
Read more：An introduction to FOREX
The best time to trade forex is generally during session overlaps when market activity reaches its peak. These periods offer increased liquidity, tighter spreads, and more significant price movements, creating optimal conditions for profitable trading.
The forex market experiences its highest trading volume and most volatile price action when major financial centers operate simultaneously. This increased activity typically leads to stronger trends, clearer technical patterns, and more trading opportunities.
Here are the three major market overlaps to focus on:
The Tokyo-London overlap occurs between 3:00 AM and 4:00 AM EST (08:00-09:00 GMT), creating a one-hour window of increased trading activity.
This brief overlap period bridges the Asian and European trading sessions, typically lasting just 1-2 hours depending on seasonal time changes.
During this overlap, you'll notice moderately increased volatility as European traders enter the market while Tokyo traders are still active. This creates excellent opportunities for breakout trades as new market participants react to Asian session developments.
The most active currency pairs during this overlap include:
PAIR |
Average pip movement |
Key features |
|---|---|---|
| EUR/JPY | 50-70 | High volatility, sensitive to both European and Asian news |
| GBP/JPY | 60-90 | Known as "the dragon," extremely volatile |
| EUR/CHF | 35-50 | More stable, influenced by ECB policies |
The Tokyo-London overlap offers excellent opportunities for momentum trading strategies as European traders react to overnight Asian developments and economic data releases.
For risk management during this period, consider using slightly wider stop losses to accommodate potential volatility spikes, and target a minimum risk-reward ratio of 1:2 to capitalize on emerging trends.
Major market participants during this overlap include Asian central banks completing their daily operations, European institutional investors beginning their day, and retail traders in both regions.
Economic news from Japan, China, and early European releases can significantly impact trading during this overlap, with particular attention to German and UK economic indicators that are often released in the early European hours.
The London-New York overlap occurs between 8:00 AM and 12:00 PM EST (13:00-17:00 GMT), creating a four-hour window that represents the most liquid and volatile trading period in the forex market.
This substantial overlap combines the two largest financial centers, accounting for over 70% of all forex transactions globally. The session typically experiences the tightest spreads and highest trading volumes of the day.
Market characteristics include rapid price movements, strong trend formations, and excellent liquidity for all major currency pairs. This period frequently determines the directional bias for the entire trading day.
The most active currency pairs during this overlap include EUR/USD, GBP/USD, USD/JPY, and USD/CHF. Cross pairs like EUR/GBP and GBP/JPY also see significant activity.
Trading opportunities during this overlap are abundant, with breakout strategies, news trading, and trend-following approaches all proving effective. Many professional traders focus exclusively on this overlap period.
Risk management is crucial during this volatile period. Using stop losses is essential, and traders should be aware that significant economic releases can cause rapid price swings and potential slippage.
The Sydney-Tokyo overlap occurs between 2:00 AM and 4:00 AM EST, representing the start of the Asian trading day and offering unique opportunities for early positioning.
This overlap typically sees moderate volatility compared to other sessions, with a focus on AUD/JPY, AUD/USD, NZD/JPY, and regional currency pairs. The relatively lower trading volume can create range-bound conditions ideal for specific trading strategies.
Key characteristics include gradual price movements, potential for early trend development that may continue into the European session, and reactions to weekend news or late Friday developments from North America.
This overlap is particularly valuable for traders in the Asia-Pacific region or those focusing on currencies like the Australian and New Zealand dollars, which are heavily influenced by Asian market sentiment and commodity prices.
Overlapping session |
Duration |
Economic data |
Trader participation |
Key characteristics |
Active currency pairs |
Average spread (pips) |
Opportunities |
Risk management tips |
|---|---|---|---|---|---|---|---|---|
| London-New York | 4 hours | US and European releases | Very high | Highest liquidity, volatility | EUR/USD, GBP/USD | 1-2 | Trend trading, breakouts | Use tight stops, watch for news |
| Tokyo-London | 1 hour | Early European data | Medium | Transitional volatility | EUR/JPY, GBP/JPY | 2-4 | Breakout from Asian ranges | Allow for wider stops |
| Sydney-Tokyo | 2 hours | Australian, Japanese data | Low-Medium | Range-bound conditions | AUD/JPY, NZD/USD | 3-5 | Range trading, early positioning | Manage expectations for smaller moves |
The worst times to trade forex typically include the mid-session lulls between major market overlaps, particularly between 12:00 PM and 2:00 PM EST when European markets are closing and before US afternoon trading picks up momentum. During these periods, market activity often slows significantly, resulting in unpredictable price movements with lower trading volume.
Weekend hours, when markets are officially closed (from Friday 5:00 PM EST until Sunday 5:00 PM EST), should generally be avoided as the lack of liquidity can lead to wide spreads and slippage when markets reopen. Additionally, major holidays like Christmas, New Year's, and region-specific holidays can create thin market conditions that are challenging for most trading strategies.
The period immediately before and during major economic releases or central bank announcements can also be problematic for traders, as price action becomes erratic and spreads widen significantly. Unless you have a specific strategy for news trading, it's often advisable to stand aside during these high-impact events.
In the following section, we will briefly introduce the factors that influence the best times to trade forex.
Liquidity refers to how easily currencies can be bought and sold without significant price changes, while volatility measures the degree of price fluctuation. These factors vary significantly throughout trading sessions and directly impact trading conditions.
High liquidity periods typically occur during major session overlaps (especially London-New York) and are characterized by tighter spreads, faster execution, and more reliable price action. These conditions benefit most trading strategies and are generally preferred by both retail and institutional traders.
Volatility can be both an opportunity and a risk. High volatility periods offer greater profit potential but require stricter risk management. Low volatility periods may be preferable for range trading strategies but can frustrate traders looking for significant price movements.
Understanding the typical liquidity and volatility patterns of different trading sessions allows traders to align their strategies with optimal market conditions, improving overall performance and consistency.
Global events and geopolitical developments can dramatically alter normal trading patterns and create both risks and opportunities in the forex market. Elections, referendums, military conflicts, trade disputes, and natural disasters often lead to increased volatility and unexpected currency movements.
During major geopolitical crises, traditional safe-haven currencies like the Swiss Franc (CHF), Japanese Yen (JPY), and US Dollar (USD) typically strengthen as investors seek security. Conversely, higher-yielding or emerging market currencies often weaken during periods of global uncertainty.
Scheduled events like elections or trade negotiations may create predictable patterns of pre-event positioning and post-event reactions that experienced traders can capitalize on. However, truly unexpected developments can lead to gap risk and challenging trading conditions.
The 24-hour nature of the forex market means that significant news can break during any session, but its impact may be amplified or muted depending on which markets are active at the time. For example, Asian political developments might have their strongest impact during the Tokyo session before being reassessed during European hours.
The forex market exhibits distinct patterns based on the day of the week, with each trading day having its own typical characteristics in terms of volatility, volume, and directional bias.
Mondays often start slowly as markets digest weekend developments and establish the week's initial direction. Tuesday through Thursday typically show the most consistent trading conditions and highest volumes, especially during major session overlaps.
Fridays frequently display unique patterns, with strong movements during European and early US hours, followed by position-squaring and reduced volatility ahead of the weekend. Many professional traders avoid holding significant positions over weekends due to gap risk from unexpected weekend news.
Certain economic releases follow weekly patterns, such as US employment data on Fridays or Australian trade data on Thursdays, creating recurring trading opportunities. Understanding these day-specific patterns helps traders adjust their expectations and strategies throughout the trading week.
Market session overlaps represent critical trading windows when multiple major financial centers are simultaneously active, creating peak conditions for forex trading. These overlaps combine the liquidity and participant base of multiple regions, resulting in increased trading volume and more significant price movements.
The London-New York overlap (8:00 AM to 12:00 PM EST) is the most significant, accounting for approximately 70% of daily forex trading volume and offering the best conditions for most trading strategies. The Tokyo-London overlap (3:00 AM to 4:00 AM EST) provides opportunities for trading European and Asian currency pairs as European traders react to Asian developments.
Each overlap period has its own typical volatility profile, with certain currency pairs showing predictable patterns of activity. For example, EUR/USD typically sees its largest moves during the London-New York overlap, while AUD/JPY may be most active during the Sydney-Tokyo crossover.
Understanding these session overlaps allows traders to focus their efforts on specific time windows that align with their trading strategy, preferred currency pairs, and personal schedule. Many successful traders specialize in particular overlap periods rather than attempting to trade throughout the 24-hour cycle.
Central bank policy decisions and announcements represent some of the most significant market-moving events in forex trading. Interest rate decisions, quantitative easing programs, forward guidance, and unexpected policy shifts can create substantial and lasting currency movements.
Major central banks like the Federal Reserve, European Central Bank, Bank of Japan, and Bank of England have regular announcement schedules that traders carefully monitor. These events often create increased volatility before, during, and after the actual announcement as markets interpret the implications for currency valuation.
Beyond the headline interest rate decision, markets pay close attention to the accompanying statement, press conference, and forward guidance which often have a greater impact on currency movements than the rate decision itself. Changes in language or tone from previous statements can signal future policy shifts.
Many experienced traders adjust their positions or stay on the sidelines ahead of major central bank announcements due to the unpredictable nature of market reactions. Others specialize in trading these events using specific strategies designed to capitalize on the increased volatility and potential trend changes they create.
Read more: Forex fundamental analysis for beginners
Read more: How to select the best analysis method for forex trading success
Read more: Effective risk management in FOREX
The best time to trade forex is during session overlaps, particularly the London-New York overlap (8 AM to 12 PM EST), when market liquidity and volatility are at their peak. This period typically offers the tightest spreads, most significant price movements, and best trading opportunities for most currency pairs.
Beginners often find the middle of the London session (3 AM to 8 AM EST) ideal for learning forex trading. This period offers good liquidity with somewhat more predictable price movements than the highly volatile London-New York overlap. The clear trends that often develop during this time make it easier to practice technical analysis and execute trades with reasonable spreads.
The London-New York overlap (8 AM to 12 PM EST) is generally considered the most profitable time to trade forex due to its combination of high liquidity, volatility, and trading opportunities. Major currency pairs like EUR/USD and GBP/USD frequently make their largest daily moves during this period, creating potential for significant profits with properly managed risk.
December is often considered the most challenging month for forex trading, particularly the second half. As the holiday season approaches, many institutional traders close positions and liquidity decreases significantly. This can lead to unpredictable price movements, wider spreads, and "choppy" market conditions that make consistent trading difficult.
The forex market closes on weekends because it follows the international banking system's operating hours. Since major banks and financial institutions don't operate on Saturday and Sunday, there's insufficient liquidity to maintain an efficient market. The weekend closure also allows for system maintenance, accounting reconciliation, and gives traders time to analyze weekly performance before markets reopen on Sunday evening.
Эрсдлийн дохио : Худалдааны дериватив ба хөшүүрэг бүтээгдэхүүн нь өндөр түвшний эрсдэлтэй байдаг.
ДАНС НЭЭХ
