Often several Forex trading beginners ask themselves what the best trading session is.
Know that, unfortunately, there is no single answer, ideal for all investors.
Of course, it is true that there are specific moments, more appropriate than others, in order to invest and be able to enter the Forex market.
But it depends, above all, on the strategy that every single trader decides to use at that moment.
For example, the scalpers who make intraday investments (daily) may prefer moments of great concentration of exchanges, while other traders, who wish to negotiate currency pairs with a longer-term view, may ignore the daily price peaks, focusing instead on positions in periods of low volatility.
Why invest in large volumes of negotiations?
A valid strategy that will allow to identify the best trading session with which it will be more opportune to negotiate is closely linked to the investment in the moments of greater concentration of the large trading volumes.
The main reason is that the Forex market is basically decentralized and open 24 hours a day.
Therefore, the best time for intraday traders is certainly that of overlapping the various sessions, that is when the traders of different nations are negotiating in a contemporary way. The greater the number of countries in which negotiation takes place, the greater the volume of negotiations and, consequently, the greater volume of prices.
What is the “dead” zone?
It is opposed to the area of greatest concentration of transactions, the so-called “dead” zone. In essence, this is an area in which the number of trades is very low.
The main reason is that different traders, in that period of time, prefer to sleep.
Identifying the dead zone is not difficult, due to the overlapping session between Asia and Europe. In this case, the trading volume is generally very thin and the trends are very unpredictable and not always, in particular, significant.
Some investors, who decide to open positions with a long-term view, prefer to enter the market during these specific moments, even if, it must be said that, there is rarely a concentration of attention of these investors in this time band, basically, because traders who make long-term investments are not worried about facing short-term volatility.
The overlap between Europe and the United States
A particularly favorable moment to negotiate on the Forex market is that of the overlap between the European and US sessions.
In these hours, in fact, the markets are populated by a large number of active traders and currency pairs are able to move rather quickly.
Not only that, the most important economic news is concentrated in these hours.
This means that most traders will prefer to enter the market in these circumstances, with the main intent to maximize profits significantly and minimize the risks involved in the investment.
The best day to enter the Forex market
Another very important factor to consider when investing in the Forex market, specifically, as regards the moment of entry, is linked to the choice of the day.
This means that there are some days of the week better than others and that are on average more “crowded” than others.
As a general rule, it is possible to state that the movements of higher prices tend to concentrate in the central part of the week, with the Tuesday and Wednesday trading sessions having a greater opportunity to encounter more significant changes in the exchange rates of the main currency pairs, obviously except for exceptions.
The time to be known for publishing the data
Finally, a further element that it is advisable to evaluate in the conception of the personal strategy of Forex trading is linked to the time of data release.
This is a very significant aspect that could affect operations and their profits, both negatively and positively.