The ability to trade Forex markets around the clock can be both a positive and a negative for many traders.
It can be a huge help to many part-time traders to be able to trade during non-business hours. もちろんです, there is also the possibility that any open positions could suddenly move against a trader while he is sleeping.
Any curious quantitative trader will be naturally inclined to wonder how different currencies tend to trade during different times of the day. Is it possible that some systems might have more or less of an edge at different times?
An article recently published on Forex Crunch suggests that Forex traders should take the time to analyze the different market sessions throughout the day in an attempt to find a sweet spot for their systems. The article breaks the Forex markets into the following three sessions:
The Asian Session
As the first trading session to open after the weekend it is not unusual to see some reaction to news events in those first couple of hours of trade and that can sometimes set the tone for markets all the way up until the European session. News flow out of Asia and the fluctuations of Japanese and Chinese equities will be the main market movers during this period.
しかし, markets are typically more quiet during the Asian session and most traders will focus mostly on AUD, NZD and JPY currency pairs. After the Asian session ends, the volatility for AUD and NZD currency pairs often drops sharply.
The European Session
The London open is typically a very busy period and can see big moves in currencies, particularly GBP and EUR.
There is also significant news flow out of Europe early in the morning and the first hour or two of trading can be very important for the rest of the trading day.
The US Session
When US markets open at 2.30pm GMT (dependent on daylight saving hours), forex markets usually see their most volatile period.
Since the US is the world’s biggest superpower by quite a margin, most of the world’s markets follow the US’s lead.
During the overlap period of 1.30pm and 3.30pm GMT, many news events and economic releases are announced and this is typically the busiest time for markets.
The article offers the following advice on choosing what time you focus on in your trading:
Deciding on the right time to trade depends on your trading strategy.
Many technical traders and scalpers prefer the quiet Asian markets since they are less susceptible to disruption from news flow.
News traders on the other hand and those traders that thrive on volatility obviously prefer the busier US and European sessions, particularly the overlapping periods.
The fact that Forex markets are open around the clock is not news to anyone who currently trades. しかし, the idea of looking for a sweet spot for your system may have been overlooked in your development process. Running a few backtests during different times might present a whole different view of your current Forex strategy.