Best Forex Trading Times.

London – New York Overlap

What are the best forex trading times?

Market liquidity is at an optimum level around 10 am and 3 pm London time (which is 5 am to 10 am NY time).

This is when the real shebang begins!

This is the busiest time of day.  During this time, traders from the two largest financial centers (London and New York) begin duking it out.

It is during this period that we can see some big moves.   Especially, when news reports from the U.S. and Canada are released.

The markets can also be hit by “late” news coming out of Europe.

If any trends were established during the European session, we could see the trend continue. U.S. traders often decide to jump in on a trend and establish their positions after reading up what happened earlier in the day.

Lastly, it’s important to know that it is during this period where the WM/Refinitiv Spot Benchmark Rate is determined.

The rate is set at 4 pm London time (11 am Eastern).  It is also known as the “London fix“.

A currency “fixing” is a set time each day when the prices of currencies for commercial transactions are set, or fixed.

Since currency prices fluctuate from second to second, a daily “reference point” is needed.

Banks and other financial institutions use this daily rate to set their currency exchange rates.  This in turn determines the prices used in corporate foreign exchange transactions.

From a trading standpoint, this daily fix may see a flurry of trading in the market prior (generally 15 to 30 minutes) to the fixing time that abruptly disappears exactly at the fixing time.

Lastly, some European traders may be closing their positions as their day ends, which could lead to some choppy moves right before lunchtime in the U.S.

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