Best time to trade Forex in South Africa to be profitable
The beauty of the Forex lies in its flexibility, one can trade whenever and wherever he wants. You can log into your trading account at any time of the day and start trading, but it does not mean you should do so. Many beginner traders tend to trade this way – when they feel like trading and do not take the trading hours into consideration. However, there exists actually the best time to trade Forex pairs and if you will follow them you will be able to significantly increase your chances of profitability. Well-experienced traders are aware of the importance of liquidity and predictability of the market on certain hours and this is why they tend to keep their trades profitable. So in case if you were wondering why are others making profits when you are not, the answer might as well lay in trading hours. Therefore, in this article, I will let you know why time matters so much, what is the connection between the hours and market liquidity, and what is the worst and the best time to trade Forex in South Africa.
When the Forex market is open
As different countries are in different time zones the Forex market opens at different hours. Due to this fact, the trading runs 24 hours a day and 5.5 days per week. Let’s explore where the trading begins and runs according to the main trading zones. The trading begins in Asia on late Sunday evening SAST and progresses each day until it is closed in the United States. The market is open in the following hours in SAST:
- The first place where the market is open is in New Zealand, where it is open from 8:00 PM to 5:00 AM
- Sydney is open from 11:00 PM to 8:00 AM
- Tokyo is open from 01:00 AM to 10:00 AM
- Hong-Kong and Singapore are open from 3:00 AM to 12:00 PM
- Germany, the Primary European market is open from 8:00 AM to 5:00 PM
- London, the world’s largest trading center is open from 10:00 AM to 19:00 PM
- New York opens at 2:00 PM and closes at 11:00 PM
We can observe that the market is open at different times depending on the country where the trader is residing in. So what is the best time to trade Forex in South Africa? It is determined by the giant markets themselves and you have to closely examine them. The major trading zones are the Asian market, European (London), and the market in the United States.
The Asian market is relatively quiet and is characterized by lower liquidity.
The European market has the highest trading volume which is heavily centered around London. The most active currencies on the market are the USD, GBP, and EUR.
The United States market has the second-heaviest volume, obviously, it is centered around New York but also includes the other states of the US. The main currencies traded are USD, EUR, JPY, GBP, and AUD.
What are the best hours to trade Forex in South Africa?
You might feel confused why would you need to know the opening and closing hours of markets in other countries, if your country of residence is South Africa? The answer is simple. The best Forex trading hours in South Africa or simply for any person from any corner of the globe is when the market is the most active. Since the main trading centers are in Europe, the United States, and Asia you could guess that the best time to trade would be when the market is open in any of the following regions. You are right, however, there are better hours. If you look closer, you will find that at some point the market hours of the three main trading centers overlap.
The United States/London – 2:00 PM – 7:00 PM (SAST) – This is the heaviest overlap within the markets. As the U.S dollar and euro are the two most popular currencies to trade more than 70 percent of the trades happen at that time.
Sydney/Tokyo – 8:00 AM – 10:00 AM (SAST) – This is the best time to trade if you are trading with the EUR/JPY currency pair. This time period does not give as high volatility as the U.S/London overlap, but it still gives a chance to trade when the pip fluctuation is high. This time slot might be considered as the best time to trade USD/JPY in South Africa.
London/Tokyo – 9:00 AM – 10:00 AM (SAST) – This is the third overlap when you can trade with the highest margins of profitability, however, it is not as good as the other two mentioned above.
The best hours to trade Forex in South Africa or anywhere in the world is when London and the U.S sessions overlap. At that time, the market is the most liquid as it has the most participants. Also, this particular period produces the strongest price moves and the trade execution is the fairest. It is the most liquid time not only for those who trade with EUR or USD but for the other currencies as well. Many people think that each currency trades heaviest when in its own local time zones. For example, you might assume the best time to trade ZAR is when the market is open in South Africa. However, the US/London overlap is among the best times to trade Forex in South Africa with any currency pairs.
How markets follow each other
Being aware of the importance of time is not solely for the purpose of benefiting from the market liquidity. To take advantage of it as much as possible the trader should understand that the markets usually follow each other. It happens not only in Forex trading but in every financial market. For example, if the markets are showing the risk or are bullish in the United States, then Asia will open the same way and will continue the trend until whatever was the cause of the bullish market in the US will not settle.
On the other hand, if Asia closes bullish or bearish, the market in Europe will open the same way. If Europe is higher when the U.S. market session opens then the latter one opens higher as well. Knowing this and observing the sessions in the main trading centers, you can make the assumptions that will drive your trades in a profitable way.
What are the other best and worst times to trade in SA?
You might be interested in what are the recommended time slots for Forex trading sessions in South Africa time. Expect the overlapping time period you can confidently trade in the middle of the week. The market shows the most movements at that time. You can also trade on the time slots when the biggest markets – London, New York, and Tokyo – are open.
Here are the worst times to trade, it does not matter where you live I advise you not to trade at this time:
Sundays – I am sorry if you were hoping to work during the week and trade only on the weekend. I have to disappoint you. On Sundays, there is a limited volume and the trading is not very profitable.
Fridays – Fridays are for fun! The market is usually unpredictable and it is not recommended to trade.
Holidays – spend your holidays with family or simply take a rest. In any case, there is a limited volume on such days.
From 10:00 PM to 12:00 PM – there is a low market volume.
South African traders have a very big advantage of being in approximately the same zone as Europe is. Therefore you can take advantage of London trading hours. While many people have to stay awake at night to get the best out of the US/London overlap you are in great comfort. The best Forex market hours in South Africa are from 2:00 PM to 7:00 PM South African Standard Time. At that time you can enjoy the highest liquidity, strongest price moves, and fairest execution. Keep it in mind and trade at the best time possible to increase your profitability!