One of the most common questions I get asked by both beginner and experienced traders is, what time of day should I trade forex, if I am based in South Africa? The answer will largely depend on personal preference but also market volatility and volume. Although certain factors (listed below) may affect your decision; ultimately choosing when to trade forex comes down to you, as the forex markets are open 24/5.
The best time to trade forex for South African traders is 10:00 as this is when the London session will be in full swing, meaning trading volume and opportunities will be plentiful. The New York session opens at 19:00, which may be harder for most traders to trade through. During the first 2 hours after these sessions open, you’ll find good trading opportunities and volume.
What Time Of The Day Should You Trade Forex, In South Africa?
The London forex markets have the highest levels of volatility, providing the best trading opportunities for traders around the world. The best time to trade forex is from 10am-2pm in South Africa, as these are the highest volume hours of the London session.
When all the major players are active, this leads to plenty of price volatility – which leads to many opportunities for profitable trades. Alongside the opportunities, there will be plenty of liquidity too. Liquidity won’t greatly effect smaller retail traders, but the larger traders will need a large amount of liquidity to get their orders filled at good prices – this is incredibly important for scalpers, intra day traders and high frequency traders alike.
Trading The London Forex Session, In South Africa
The London forex markets open at 10:00 SA Time, and the first 2 hours of the session are the most active. This means the London session is the prime time for South African traders.
When the London forex markets are open, the European markets are also in full swing. This is because traders in Europe use London as a platform for their trades – and vice versa.
In the Tradingview chart above, showing the EURUSD currency pair, you’ll see the volume chart spikes during the London trading session, then as soon as the market closes, the volume decreases massively to the point it’s not even worth trading.
If you choose to trade during this time, it would be wise to capitalise on high trading volumes and large amounts of volatility. The best way to do this is to choose a trading strategy that suits your needs.
In order for you to make the most out of the London session here are a few strategies:
Day Trading – This is where you buy or sell currencies at 10am, hold them until the close of the daily forex market which is at 4pm. This is a great strategy for you to use if volatility and volumes are your priority.
Scalping – The goal of scalping is not to hold currencies over the course of several hours, but simply buy and sell within seconds or minutes. Due to the high levels of volatility seen in the London session, this trading style can be extremely lucrative.
Trading The New York Forex Session, In South Africa
The New York markets open at 19:00 SA Time. This means the New York session is not a good time to trade if you’re based in South Africa.
The first two hours of the New York session are great, due to the London trading volume still being there. However, once the London markets shut, the New York markets will be left with much lower volumes and volatility.
If you choose to trade forex during this time, we recommend making use of automated trading systems – as these can do the work for you. You can still take advantage of low levels of risk and high probability trades. There are less opportunities available to you during the New York session, so it’s not a good time to trade if you’re a high risk taker or someone with a sizeable account that needs a large amount of liquidity in the market.
Trading The Asian Forex Session, In South Africa
The Tokyo markets open at 12am SA Time. This means the Asian session is a bad time to trade if you’re based in South Africa and most traders will be asleep.
During this time frame there will be few other markets open, which means there will be less volatility during this period. Not only will the volume be lower, there will be less opportunities to make money due to the lack of trading activity.
We simply don’t recommend trading at this time, as there are better times to trade throughout the day for traders based in South Africa, for instance between 10am and 2pm.
In fact, no matter where you are in the world, trading the Asian session is never a top priority. Compared to the opportunities presented in the other sessions throughout the day, there is no need to trade through the Tokyo session. I have personally caught the tail end of the session before, just as the pre London markets start lining up and that can be useful – but I think that the rest of the session is worth missing.
Can You Trade Forex At Any Time Of The Day?
You can trade forex at any time of the day, but 10:00 is the best time to do it if you’re in South Africa.
By choosing when to trade forex well, you’ll maximize your opportunities and profits – while minimizing stress associated with trading during quiet market periods.
If you want to be profitable at forex trading, your best bet is by following the trend at all times. Many traders choose to trade from the London session and carry their positions over to the New York session.
This is due to European and US economic data releases, which may influence price action in both time zones. This gives you plenty of opportunities for profitable trades, if done right.
What Will Happen If I Trade Forex Outside Of The Session Times?
If you try to trade forex outside of the prime trading hours, volume will be much lower. This means you’ll have a smaller pool of orders to execute your trades against. This also means that there will be less movement in the price per currency, which means you’ll incur more slippage.
Slippage is where your trade execution is not instantaneous and occurs when the price moves against your trading position before it can be filled. The more slippage you experience, the more money is deducted from your account balance. Trading outside of the session times is not recommended unless you’re already a profitable trader with a good amount of experience.
On the chart above, we can clearly see the difference between trading during the prime forex trading hours, or trying to trade out of London and New York sessions, during Asian times. The volume isn’t even being picked up on the indicator at the bottom of the chart and the movement, in terms of pips, is laughable. During that time, spreads would have been much larger too so it would have rendered the session impossible for intraday traders or scalpers.
In Conclusion – When Is The Best Time Of Day For South African Forex Traders To Trade?
In summary, the best time of the day to trade forex in South Africa is between 10:00 and 14:00, as this is when there will be a large pool of buyers and sellers in the market.
This means your trading positions will have the best chance of being filled with lower spreads, as liquidity – or cash available to be traded at any one time – is higher during these hours. In addition to this, volatility levels are much higher as well, which means you’re more likely to make a bigger profits due to much more lucrative trading opportunities.
Let’s break this down:
– Low volatility and volume = lower profits (the less movement in price, the less chance of making money)
– Less opportunities – less trading signals = losing trades
– Trading against the trend = losing trades
– Not taking advantage of higher volatility and volume = lower profits
The best time to trade is always going to be when there are a large number of traders in the market.
I hope you have found this article useful, please do let me know in the comments if you have any queries or questions. If you’re a trader in South Africa, what time are you trading the forex markets?