Setting the Clock Right: The Best Time To Trade Forex In India And Other Tips

In the forex market, many components come together for ensuring smooth operations and positive outcomes for a trader. Careful timing of trades is one of such components. In this article, we will explain how market timing is made, what time is best (and relatively worse) for trading, and how to choose the best time for forex trading in India.

Trading Big: List of Major Forex Trading Sessions

Performing successful forex trades requires you to know the major forex trading sessions and what they can bring you. Usually, they don’t overlap with traditional Indian working hours, so keep an eye on the time when you plan to open or close positions.

London Stock Exchange

Working hours: 07.00 a.m. to 04.00 p.m. (GMT) or 12:30 p.m. to 09:30 p.m. (IST).

The London session forex time in India is utterly important because the London Stock Exchange is responsible for as much as 43% of the global forex trading volumes (at least the Bank for International Settlements says so). This session witnesses the first boost of liquidity and begins trading at reasonable hours by IST. Traded pairs include EUR/USD, GBP/USD, and also USD/CHF, and USD/JPY. Yet the first two pairs are the best for trading during this session. Mind it if you plan to do EUR/USD trading time in India.

New York Stock Exchange

Working hours: 12.00 p.m. to 08.00 p.m. (GMT) or 05:30 p.m. to 01:30 a.m. (IST).

This stock exchange is located in the country that issues and regulates the dollar. Dollar, as you should know, is participating in 90% of forex trades, so the working hours of the New York Stock Exchange should be on your timetable. The liquidity and trading opportunities abound during this trading time since this venue concentrates about 17% of all global currency trading. Here, you can trade major pairs like EUR/USD, GBP/USD, and more exotic and volatile pairs.

Tokyo Stock Exchange

Working hours: 11 p.m. to 8 a.m. (GMT) or 04:30 a.m. to 01.30 p.m. (IST).

It is a third big forex trading hub on a global scale. This exchange is important if you plan to trade pairs involving JPY (yen). The Tokyo exchange concentrates around 6% of forex trades worldwide, but the yen trading rates are impacted by news about the Chinese economy. That’s why you’ll have to keep an eye on this news segment, too.

Sydney Stock Exchange

Working hours: 00.00 to 06.00 a.m. (GMT) or 5:30 a.m. to 11.30 a.m. (IST).

Australian trading session is important because it impacts the price movements of AUD and all currency pairs that rely on it. Australia’s economy is at the crossroads of European, American, and Asian economies, that’s why Sydney session forex time in India raises interest among forex professionals.

Indian Stock Exchange

Indian currency trading market also has its schedule. Traditionally, the local forex market opening time in India was 9.00 a.m. and the session lasted to 05.00 p.m. (IST) (which is 03.30 a.m. to 11.30 a.m. GMT). However, the global pandemic of Covid-19 brought its correction to this schedule, which was shortened to 10.00 a.m. till 02.00 p.m., and then extended to 10.00 a.m. till 03.30 p.m. IST. So check in advance the local forex market closing time in India, if you time your trades after the Indian market.

Now let’s put it all into the comparative prospect.

As you can see in the table, forex trading literally goes round the clock. However, such a comparison brings one more insight. There are so-called overlapping hours when two big trading sessions are running simultaneously.

Overlapping hours of trading sessions

Such overlapping hours provide a doubled boost in liquidity and trading activity, that’s why they are considered to be the best time points for successful forex trading. Volumes are very high, spreads are tight, that’s why trading is highly recommended. The usual advice is that if you cannot trade all day long, pick this overlapping period and use its potential. We want to point you to two key overlaps that can benefit you greatly.

London Stock Exchange and New York Stock Exchange hours overlap from 12.00 p.m. to 16.00 p.m. GMT (05.30 p.m. to 09.30 p.m. IST).

Tokyo Stock Exchange and London Stock Exchange hours overlap from 07.00 a.m. to 08.00 a.m. GMT (12.30 p.m. to 01.30 p.m. IST). But please mind the daylight saving policies and check if the time needs to be moved forward or backward in line with the time of the year.

If you are interested in rupee trading and need to trade while the Indian market is running at full throttle, then pay attention to the overlap between the Indian and London exchanges. It happens from 07.00 a.m. to 11.30 a.m. GMT (12.30 p.m. to 05.00 p.m. IST), and you can benefit both from important news that hit the Indian market and from the liquidity flow that comes with the London trading session.

Critical Matter: Observing Accurate Forex Trading Hours in India

As you can see, the forex market around the world works in a 24/7 mode because several major trading sessions smoothly flow one into the other due to the time differences. So, when one session comes to an end, some others are in the full swing, and so on.

Then why is this distinction important, if you literally can trade any time of the day or night? Because every separate session gives a boost to a specific currency pair and makes trading it especially profitable. Hence, trading EUR/USD or GBP/USD is best performed at different hours. Besides, opening hours of big sessions provide huge influxes of liquidity and high levels of volatility, which makes trading especially lucrative. When the liquidity is booming, the spreads are narrow; and when volatility is high, there is a good chance to earn more pips per operation.

How to spread your trading activity throughout the day, if you want to make the most of it? It depends on what currency you plan to trade. If your pair includes rupees, you need to orient yourself towards the working hours of Indian exchanges and see what global sessions they overlap with. The local markets provide a basis for rupee volatility, and the global markets provide sufficient liquidity for a dollar and other currencies to trade the rupee against.

If you trade in the most popular pairs like EUR/USD or GBP/USD, then look to the global sessions and match your schedule to the US forex market opening time in India and to its closure.

The forex market across the world works in the 24/7 mode because several major trading sessions smoothly flow one into the other due to the time differences.

When Not To Trade Forex: Days And Hours To Refrain From Trading

While a lot is said about the best time to trade forex, it is also important to mention when not to trade forex. Operations undertaken at certain time periods may disappoint you or even lead to significant and totally avoidable losses. Besides, holidays in India and around the world do not coincide, so keep an eye on the holiday schedule usually provided on the websites of big reputable brokers. Or keep your own schedule. In such a way, you won’t open a position in the least favorable time and won’t get stuck amidst low liquidity and erratic unpredictable price changes.

1. Market opening and closing hours

These points of time, the first half-hour of Monday trades and the last hour of Friday trades, are linked to very high volatility and unpredictability of price movement. Trades are usually not carried over weekends, so positions are closed massively, and it makes the price oscillate. On Monday, trades begin, and news consequences are included in the price correction, so the first half-hour of trades is not for the faint-hearted and not for beginners. The second half-hour is the time to observe the shaping trends and get ready, and then you can start opening positions when the general picture of price movement has become clear.

2. Weekends

The global forex leaders do not trade on weekends, it’s a time-honored tradition. That’s why you won’t be able to trade either. But mind that due to differences in time zones the weekend-based forex market timings in India may shift depending on your location.

Traditionally, the forex market closes at 5 p.m. in New York City (EST zone) and resumes its work exactly 48 hours later. It means that you are able to start trading again on Sunday, at 5 p.m. (EST zone). Yes, the working hours of the forex market technically begin on Sunday, while the weekends still last.

If we convert this weekend pause into the Indian Standard Time (IST), we get the following:

• Friday, 5 p.m. EST = Saturday, 2.30 a.m. IST = Friday, 10 p.m. GMT;
• Sunday, 5 p.m. EST = Monday, 2.30 a.m. IST = Sunday, 10 p.m. GMT

As you see, you can trade all Friday through, and then start trading Monday morning, in the Indian time framework. Looks quite convenient.

3. Big bank holidays

These are those unique days of the year when banks are closed and nothing happens. Life stands still. If such holidays are scheduled in the USA or Great Britain, it’s not recommended to trade because there will be no movement on the market. Banks of these countries impact the liquidity of the dollar, pound, and euro, so a pause in their work will mean a pause in the dollar and euro trade.

If holidays will put on hold work of banks elsewhere, say, Japan, Australia, or India, it’s reasonable to assume that these currencies will see a drop in trade and liquidity. So it’s safe to assume that it’s not the best time to trade such currency pairs.

For this reason, carefully explore the schedules of big holidays around the world and mark them in advance to be prepared.

4. Big news arrival

We believe you have already learned this rule. When some big announcement related to the economy is released, the market can go unpredictable in mere minutes, so it’s better to stay on the shore for an hour or two and see where the wind will blow first.

Not just news, but even the rumors that spread in advance can impact the prices, so you will be on the safe side to stop trading an hour or two before the release as well. With news related to NFP (Non-Farm Payrolls), a whole day is not fit for trading, so sit back and observe what trends are forming.

5. Scheduled annual or quarterly speeches of important financial regulators

When people representing big financial institutions speak, the echo of their words reaches the farthest corners of the world. It may sound pathetic, but it’s the hard-learned truth. The Chair of the Federal Reserve, the Governor of the Bank of England, and the President of the European Central Bank speak publicly, they can say things that indicate what changes await not only their corresponding countries but the whole world. Add the Bank of Japan representative and you have the list of people to listen to attentively.

We say it with two goals in mind: first, to point you to people and information that can significantly impact the forex market and your trading success, and to tell you that days, when these speeches are delivered, are not the best forex trading time in India.

6. Times of unexplainable market volatility

There may be moments when in the absence of any visible reason the market behaves wildly. If you cannot explain what is going on, you’d better refrain from trading until the market fluctuations become understandable and more or less predictable. Maybe some information was leaked while it was not supposed to be, or a similar event happened. In any case, it’s the specific time not to trade forex.

How To Choose Time For Your Particular Currency Pair

Technically, the best forex session times in India are forex session times in India when you have money and the market is open. However, exact time also matters. The best time for you depends on what currency pair you trade – based on rupee, euro, yen, or Australian dollar.

Trades in major currencies (EUR and USD) are best performed during the London and New York sessions, yen is better traded when the Tokyo session is actively running.

There is also the Sydney session that starts in Australia. It matters to you if you plan to deal with the Australian dollar (AUD).

If your goal is to trade pairs that include the rupee, you need to keep an eye on the Indian market, then aim between the opening hours and forex market closing time in India.

Also, keep in mind the time when trading is not recommended (as we explain in the section above).

So, when you put together the recommended and not recommended times for trading into a coherent picture, you can define what is the best time for the specific pair you keep in mind.

Matching Success with Time: key Ideas about Forex Trading Timing

We hope that the ideas and the schedules that we provided will help you understand when to trade and how time matters in forex. Let’s run a brief reminder:

• Opening and closing hours of exchanges are too volatile, so the risks of losing money are high.
• Overlapping hours of different exchanges provide plenty of liquidity volume and moderate spreads, so it’s the best time to trade (relatively speaking, of course).
• Different currencies are best traded during different trading sessions since the exchange rates and prices are defined by the news coming from different countries.
• If you plan to trade currencies that include the rupee, pay attention to the working hours of the Indian stock exchange and when forex market opens in India.
• Pay attention to the announcement of big news, since it may impact the prices severely. It’s better to refrain from trading during such a period.

Wrong timing can be as damaging to your initial capital as a bad trade or wrong price prediction. That’s why it’s better to do some trading practice and only then move on to trading for money. When you learn to time the market well, you’re more likely to succeed and make profits through trading instead of losing them.

Conclusions

We tried to outline for you the key ideas about timing the trades and choosing the best time for trading if you operate from India. It all depends on your goals and currency preferences, for sure, but some general rules also apply.

We suggest that you acquaint yourself with the tips and explanations we provide, set up an account for demo trading, practice, and only then hit the market in real-time mode. It will guarantee that you won’t lose money because of improper timing and will learn to ride the market for successful forex trade instead.

FAQ

by JustMarkets, 2022.04.26