Avoid Forex Trading

When Should I Avoid Trading?

The least active time to trade -- dare we call it the “cold zone” -- is the European-Asian overlap session. Most traders are sleeping (or taking a nap) during this short period. Trading volume is very thin and trends are unpredictable during this period. Stay out of the cold zone! However, this is a good time to get prepared for the opening of the European session.

The cold zone runs from 2am to 4am EST. (BD Time 1pm to 5pm)

Forex Market US Session

The US Session

The US session is headquartered in New York. The GBP/JPY and USD/CHF show high volume and volatility during this time since their transactions require US dollars. Trading during this session becomes even more active when the US stock and bond markets open because foreign investors need to convert their currencies into dollar-dominated assets. The GBP/CHF often makes strong price movements during this period.

The US session runs from 8am to 5pm EST. (BD Time 7pm to 6am)

US Session Watch List:

• GBP/CHF
• GBP/JPY
• USD/CHF
• GBP/USD
• USD/CAD

Forex Market European Session

The European Session

The European session is headquartered in London. The large number of market participants has made London the world’s most volatile market for trading currencies. And it links with both the Asian and American sessions.

Look at the GBP/JPY and the GBP/CHF for strong price movements as European assets are converted into dollar-denominated assets. These conversions can cause the currencies to make strong price movements.

Be prepared to get up early (or stay up late) because the European session runs from 2am to 12pm EST. (BD Time 1pm to 11pm)

European Session Watch List:

• GBP/CHF
• GBP/JPY
• USD/CHF
• GBP/USD
• USD/CAD

Currencies Trade In Power Hours

Which Currencies Should I Trade During the Power Hours?

Look for the following currencies to make the largest pip movements during the Power Hours.

• EUR/USD
• USD/CHF
• USD/CAD
• GBP/JPY
• GBP/CHF

Forex Power Hours

When Are The Power Hours?

The Power Hours run from 8am to 12pm EST. (BD Time 7pm to 11pm)

Yes, the most active trading period lasts only four hours every day! This is the US-European overlap session, which is the time when the world’s two most active trading centers cross -- as the European session is closing and the US session is opening. It is a small, but very active, window that some currency traders call the “hot zone.” And many professional traders focus their best efforts on trading during those four powerful hours.