Read on if you are looking to know the best time to trade whether crypto or foreign currency
One of the traders’ responsibilities is to find the best entry and exit times for their trades. Quite often, finding the best time to trade is the key factor that determines whether a trade will be closed at a profit.
Markets are constantly changing and it is important to understand how they function
Of course, there is no reliable way to know the best time to trade every time, because the markets can be quite unpredictable.
However, in order to identify the right time to trade, you can study the markets and their opening hours in order to develop an optimal strategy.
If you want to know the best time to trade follow the tips bellow
1. Track Trading Sessions
Foreign exchange financial markets operate almost 24/5 while crypto trading operates 247.
When trading stops on one side of the globe, traders on the other side start trading. Thus, trading sessions follow one another and overlap each other, which creates potential opportunities for traders and this is for only currency trading which can be applied to crypto as well
Traders traditionally follow 3 trading sessions of peak activity — European, Asian, and North American.
There are also called London, Tokyo, and New York sessions according to the financial centers of each session.
Since most banks and corporations operate there, the highest business activity is observed in these three regions. Let’s dwell on these trading sessions.
1. Asian session.
It starts at 23:00 GMT and continues until 8:00 GMT. The Asian session includes Japan, as well as China, Australia, and New Zealand, so the timeframe for this market session is outside Tokyo time. The Asian session can set the trend for subsequent sessions, so it is important to pay attention to the events taking place during these hours. As we are talking about the Asian market, local currency pairs such as the JPY may become more volatile.
2. European session.
One of its main features is that it overlaps the Asian session in the morning and the American session in the evening. It starts at 7:00 GMT and lasts until 16:00 GMT. This time zone includes several major financial markets including London, Frankfurt, Paris and Moscow. Some of the popular currency pairs on this timeframe are GBP and EUR; market volatility usually increases.
3. American session.
The New York trading session includes not only the United States, but also Brazil, Mexico and Canada. It runs from 12:00 GMT (noon) to 20:00 GMT. The American and European sessions overlap each other, therefore, due to high trading activity, prices show significant dynamics (for example, EUR / USD).
2. Follow important news
Observing trading sessions alone may not be enough, as it is important to understand the sources and reasons for the increase or decrease in asset volatility. To identify such cases, traders need to follow the news and use the economic calendar. The Pocket Option platform has an Analytics section that is regularly updated according to the latest economic news.
The market is very sensitive to regional and national economic factors, such as key rate and tax policy, inflation rate, employment in the non-agricultural sector, etc. Natural disasters, protests — all these can have a strong impact on the market.
The ability to see the big picture and establish causal relationships helps to plan trades efficiently on Pocket Option.
To the question “When is the best time to trade?” there is no one correct answer as it depends on many factors. The answer to this question can vary depending on the trader’s trading style, timeframe, and target market. Keeping track of the market and news is a very useful habit for both beginners and experienced traders.
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