Forex trading operates 24 hours a day for five days a week, allowing you to trade any time using the forex trading app. There are certain times when the market trends are more liquid and you can maximize your profit.
Generally, the best time for forex trading is during two overlapping trading sessions due to more participants, higher liquidity, and narrow spreads.
Let’s understand why forex trading during active hours is profitable:
#1. Increased Volatility: Profitable trades often result in more pips gained. During active hours, currency prices experience frequent fluctuations, increasing the potential to capture more pips compared to quieter hours when prices are less volatile.
For instance, the GBP/USD pair exhibits the highest volatility within the first hour of market opening, presenting opportunities to capitalize on its price movements.
#2. Tighter Spreads: Active trading hours coincide with higher asset liquidity, leading to tighter spreads. This means that the difference between the buying and selling price of a currency pair becomes narrower, resulting in reduced transaction costs.
With more traders participating during these hours, the transaction costs are divided among a larger pool of participants, benefiting individual traders.
We have discussed the best time for forex trading in India in 2 types of timings –
- Forex trading sessions time in India
- Trading session overlaps
Best Time for Forex Trading (Forex Trading Sessions in India)
The forex market is divided into four major trading sessions based on the time zones of major financial centers around the world.
- Asian Trading Session
- European Trading Session
- North American Trading Session
- Pacific Trading Session
Let’s take a closer look at each trading session and their characteristics that can impact trading strategies and market trends.
#1. Asian Trading Session
The Asian session begins with the opening of the Tokyo market and includes other financial centers such as Singapore and Hong Kong. The Asian session is known for its low volatility and low liquidity compared to other trading sessions.
Tokyo-Asian trading session
The Tokyo-Asian trading session operates from 5:30 AM to 2:30 PM Indian Standard Time (IST). The best currency pairs involve the Australian dollar (AUD), New Zealand dollar (NZD), and the Japanese yen (JPY).
You can trade in currency pairs for Tokyo –
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Hong Kong and Singapore/Asian trading session
The Hong Kong and Singapore/Asian trading session starts at 6:30 AM and ends at 2:30 PM. During this session, the best currency pairs involve the Japanese yen (JPY) and major currencies like the US dollar (USD) and the euro (EUR).
The trading pairs for this session:
#2. European Trading Session
The European session starts around 12:30 PM IST as London becomes the primary financial hub. The European trading session is known for high volatility and liquidity, making a favorable environment for traders seeking fast-paced trading opportunities.
London-European Trading Session
The London-European trading session is one of the most active and influential sessions in the forex market. It begins at 12:30 PM Indian Standard Time (IST) and ends at 8:30 PM IST.
London is the financial capital of Europe, playing a crucial role in driving market movements and liquidity during this session. During the London-European session, you can expect heightened volatility and substantial trading volumes.
You can trade in these currency pairs
The Frankfurt-European session overlaps with the London session and begins at 11:30 AM IST, ending at 7:30 PM IST. Frankfurt, as a major financial hub in Germany, contributes to the liquidity and volatility of this session.
If you want to do trading, I would suggest starting investing with Rs 5000 as an initial investment.
#3. North American Trading Session (New York)
The New York – North American trading session is the second largest forex trading volume with around 17-18% of overall turnover. The New York trading session starts at 5:30 PM IST and closes at 2:30 AM IST.
With the US dollar being involved in approximately 90% of all forex transactions, this session offers high activity and liquidity. You can trade in US-based currency pairs like EUR/USD, GBP/USD, USDCAD.
You can also invest in US stocks from India through US stocks investments apps like Vested, INDmoney, or Groww.
#4. Pacific Trading Session
The Pacific trading session includes financial centers such as Sydney and Wellington. While it is not as actively traded as the other sessions, it sets the stage for the subsequent Asian session by providing initial market momentum.
Currency pairs involving the Australian dollar (AUD) and New Zealand dollar (NZD) are influenced during this session.
The Sydney-Pacific session operates from 5:30 AM to 12:30 PM IST. The best trading pairs are USD/JPY, AUD/NZD, EUR/USD, USD/CHF, and GBP/USD.
The Wellington-Pacific session starts at 3:30 AM and ends at 10:15 AM.
Forex Market Timings in India
The Forex trading hours in India align with Indian Standard Time (IST) which is 5 hours 30 minutes ahead of Greenwich Mean Time (GMT) or (GMT+5.5).
|Trading Session||Opening Time (IST)||Closing Time (IST)|
|Tokyo (Asian Session)||5:30 A.M.||2:30 P.M.|
|Hong-Kong and Singapore (Asian Session)||6:30 A.M.||2:30 P.M.|
|Frankfurt (European Session)||11:30 A.M.||7:30 P.M.|
|London (European Session)||12:30 P.M.||8:30 P.M.|
|New York (North American Session)||5:30 P.M.||2:30 A.M.|
|Wellington (Pacific Session)||3:30 A.M.||10:15 A.M.|
|Sydney (Pacific Session)||5:30 A.M.||12:30 P.M.|
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Best Time For Forex Trading In India (Trading Session Overlaps)
The best time for forex trading is when the market is active and displays high liquidity and volatility. During these periods, traders have increased opportunities for profitable trades and optimal execution of orders.
The best trading time varies depending on the currency pairs being traded and the trader’s preferred trading strategy. You can use the paper trading apps to practice your trading strategies without risking real money.
Generally, the most active time is when the market hours overlap between two different trading sessions, as it provides increased trading volume and volatility, offering greater trading opportunities.
Additionally, you should consider economic news releases and important events that may impact currency markets to maximize your trading potential.
Let’s explore the three trading session overlaps:
- Sydney and Tokyo Sessions – 5.30 AM to 12.30 PM IST
- Tokyo and London Sessions – 1.30 PM to 2.30 PM IST
- London and New York Sessions – 6.30 PM to 9.30 PM IST
Best Days to Trade in India
Apart from considering the best trading sessions and overlaps, it’s important to note that certain days of the week can offer better trading conditions. While the forex market operates five days a week, there are days when market activity is more pronounced:
- Mondays – The forex market tends to open with increased activity as traders react to news and events that occurred over the weekend.
- Tuesdays and Wednesdays – Activity level typically remains consistent if there were significant actions on Monday.
- Thursdays and Fridays – These days tend to be the most volatile and liquid in the forex market.
Hours difference during summer and winter:
|Region||Summer (opening and closing time IST)||Winter (opening and closing time IST)|
|Sydney||3:30 AM – 12:30 PM||2:30 AM – 11:30 AM|
|Tokyo||4:30 AM – 1:30 PM||4:30 AM – 1:30 PM|
|London||12:30 PM – 9:30 PM||1:30 PM – 10:30 PM|
|New York||5:30 PM – 2:30 AM||6:30 PM – 3:30 AM|
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XAUUSD Opening Time in India
XAUUSD is a commodity based currency pair in the forex market that represents the value of gold (XAU) quoted in terms of the US dollar (USD). It is often referred to as the “Gold-USD” pair. In this currency pair, XAU represents the price of one troy ounce of gold, and USD represents the US dollar.
- You can trade in XAUUSD as well as other metals from 9:00 AM IST to 5:00 PM IST from India.
- If you are a Meta trader (online trading platform used for trading in forex, indices, cryptocurrencies, and commodities), then India’s gold market opening time is from Monday 2:30 A.M. IST to Saturday 2:30 A.M. IST.
Other market opening times in IST:
|Name||Opening Time (IST)||Closing Time (IST)|
|NYSE timings in India||7:00 P.M.||1:30 A.M.|
|NASDAQ timings in India||7:00 P.M.||1:30 A.M.|
|London Stock Exchange timings in India||1:30 P.M.||10:00 P.M.|
|Hong Kong Stock Exchange timings in India||6:45 A.M.||1:30 P.M.|
|Shanghai Stock Exchange timings in India||7:00 P.M.||12:30 P.M.|
|SIX Swiss Exchange timings in India||1:30 P.M.||10:00 P.M.|
|Taiwan Stock Exchange timings in India||6:30 A.M.||11:00 A.M.|
|Japan Exchange group timings in India||5:30 A.M.||11:30 A.M.|
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Time to Pause Forex Trading in India
In certain scenarios, it’s advisable to pause or exercise caution in forex trading:
- High Volatility: During major economic news releases, central bank announcements, or geopolitical events, market volatility can spike significantly. You should evaluate the potential impact of such events and consider reducing the exposure or temporarily pausing trading to avoid excessive risks.
- Slippage: Slippage occurs when the execution of a trade happens at a different price than anticipated. During periods of high volatility or low liquidity, slippage is more likely to occur. You should be aware of these conditions and adjust your trading strategies accordingly.
- Rollover: Rollover refers to the process of extending the settlement of an open position to the next trading day. You should be cautious of rollover costs, especially when holding positions overnight or during weekends when rollover rates may be higher.
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The best time to trade forex in India depends on the specific currency pair you wish to trade. Each currency pair is highly liquid during the trading session overlapping.
For instance, if you are interested in trading the GBP/USD pair, it is advantageous to trade during the overlapping hours of the London and New York sessions.
This overlap ensures higher trading volumes and enhanced opportunities for potential profits.
Trading during active hours offers increased volatility, which means more opportunities to gain pips. It also results in tighter spreads, reducing transaction costs due to higher asset liquidity.
India’s gold market for Meta traders opens from Monday 2:30 AM IST to Saturday 2:30 AM IST.
XAUUSD representing the value of gold quoted in terms of the US dollar, can be traded from 9:00 AM to 5:00 PM IST in India.
Mondays are active due to reactions to weekend news, while Tuesdays and Wednesdays remain consistent. Thursdays and Fridays are the most volatile and liquid days.
The trading session overlaps include Sydney and Tokyo sessions, Tokyo and London sessions, and London and New York sessions. These overlaps provide increased trading volume and volatility, creating more opportunities.
The best timing for forex trading is during the overlapping trading sessions when two financial centers are active. These sessions typically offer higher liquidity, increased trading volume, and tighter spreads, providing more opportunities for profitable trades.