Trading volume, liquidity, and volatility vary during different hours of the day. A release of an economic indicator can trigger high volatility even if the figure comes out exactly as expected. The timing serves as an excuse to buy or to sell, and the moves do not always make sense.
Do you hate this kind of surprises? Here are the hours when such moves are unlikely. The times are all GMT.
- 9:00 to 12:00: This is the window between the middle of the London / European session and just before traders in New York get into play. European markets open at 7:00 and there is a lot of action around the beginning of the session and also around 8:30, when UK figures are released. Things calm down around 9:00 and stay relatively range-bound until 12:00, when New York comes into play. Key US indicators are published at 12:30, so if you hate surprises, 12:00 is the best time to exit the position.
- 21:00 to 00:00: The US session winds down at 20:00 GMT, but liquidity can become too low in the immediate aftermath. We had some “flash crashes” around these times. By 21:00 GMT, the probability for a surprise already diminishes, and low trading volume implies calmer trading conditions. Tokyo opens at 00:00, and that is your cue to finish your session if you despise shocks.
- 2:30 to 5:00: After traders in Tokyo performed their big moves of the day and Australian data is out of the way (1:30), the atmosphere cools once again. Chinese data is released at 2:00, but the frequency is not that high. In any case, smooth sailing is restored around 2:30. The only exception is a rate decision in Australia, but that happens only once per month. 5:00 is a good time to move on, as traders in London begin preparing for the European session quite early.
Do you prefer trading at these quiet times? Or are you looking for more action?Get the 5 most predictable currency pairs