Timing is essential factor in forex trading because there are times when the market is highly active and other times when it is dormant.
Whilst forex trading is open 24 hours on weekdays, allowing investors from all over the world to trade at any time, the reality is that trading activities vary during different times of the day. You can make a lot of money in forex trading when the market is moving up or down. However, it is difficult to earn good money when the market is not moving at all.
Basically, the forex market is active when two active trading sessions coincide. Let’s recap what is a trading session. A trading session refers to a period when forex trading is open in a particular city or region. The Forex market has a 3-session system, which means that the trading sessions are categorized into three: Asian, European, and North American sessions.
Have you wondered why Forex trading is open on Sunday Midnight in East Africa? This is because at that time it is already Monday morning in New Zealand, which is a major financial center. However, New Zealand does not have a trading session of its own, it uses the Sydney session.
So how many trading session are there in the world? Here they are:
Trading Session Local Time East African Time
Sydney Session 7:00 AM – 4:00 PM 11:00 PM – 8:00 AM
Tokyo Session 9:00 AM – 6:00 PM 3:00 AM – 12:00 PM
London Session 8:00 AM – 4:00 PM 11:00 AM – 7:00 PM
New York Session 8:00 AM – 5:00 PM 3:00 PM – 12:00 PM
From the table above, it is clear that the London and New York sessions open at 11:00 AM and 3:00 PM East African time respectively. On the other hand, Tokyo and Sydney sessions are open when it is nighttime in East Africa.
To determine the best time to trade Forex in East Africa, you will check the time that is suitable for you. If you want to trade during the day, you should choose the time when London and New York Sessions are both open. These financial centers are usually very busy because they do a lot of business. Thus, the liquidity is very high during the New York and London sessions, and you can make a lot of money trading those sessions.
Fortunately, these sessions coincide in the afternoon in East Africa when people are starting to close business. Thus, you can wait until after work to start trading forex in East Africa, and you make a lot of profit.
You can also make good money trading Forex in East Africa during the night when the New York session coincides with the Sydney Open at 11:00 PM EAT, or at around 5:00-6:00 AM EAT when the Sydney and Tokyo sessions are open, just before going to work.
However, the market is always very liquid and active at around 10-12 AM and 4-6 PM East African Time when London and New York sessions are open.
The busiest time of them all is 4-6 PM EAT when London and New York sessions coincide. The trading volumes at this time are very high, and the market can move 1000 pips in a few minutes. Furthermore, the offices are closed around this time in East Africa so you can comfortably sit down and make money through forex trading.
It is now up to you to choose the best time to trade forex in East Africa. For me, 4-6 PM EAT is my best time, but I like to do my analysis earlier as I wait for this time.