Time is everything in life. In fact, time is life. Therefore to know the best time to trade forex in Nigeria means talking of when to position and make money from the forex market.
Before I go into details of best time to trade forex in Nigeria, I will like to tell you that what matters most is your trading strategy, rules, and plans. If you get these right, you will make money at any given time trading forex.
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Forex market is a very large and active market that runs 24 hours daily, excluding weekends.
That the market is opened 24 hours daily does not mean it is active all through. Sometimes traders become skeptical about the market conditions as such pull away, watching how things unfold. In that case, the market will be dull or in a consolidation mode.
To understand the best time to trade forex in Nigeria, you have to know the exact Sessions that made up the market period.
The forex market is broken up into 3 major trading sessions, which are:
- Asian session
Trading Session Nigerian Time (GMT +1)
- Asian Session 12:00 AM to 09:00 AM
- London Session 08:00 AM to 05:00 PM
- New York Session 02:00 PM to 11:00 PM
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There are other Sessions in between, but these three are the major ones you need to know. Understanding the timing and the volume of trade at this Session will really guide you on the right time to trade forex.
I will like you to know that there are lots of opportunities at any given time in the forex market. Therefore, your success largely depends on how you understand the market.
Let’s consider this forex trading Sessions in detail
Asian or Tokyo Session
This session of the forex market is considered the beginning of the trading time. Most traders, more especially daily and price action traders take their trading decision at the beginning of this Session.
The Asian or Tokyo Session opens by 01:00 AM and closes by 10:00 AM, Nigerian Time. It is referred to as the Asian Session because the major players or traders on the market at the Session are the Asian countries such as Australia, Hong Kong, Singapore, and Japan
In fact, Japan is the 3rd largest trading center in the world, which is why the Japanese Yen moves crazily in this Session.
20% of the total volume of the forex market is being determined by this Session of the forex market.
The best currency pairs to be traded at this Session are AUD/USD, USD/JPY, and NZD/USD. All the Asian currency pairs are good pairs to trade at this time of the market.
In this case, Australian and Japanese news move the market or usually cause a spike in the market.
Looking at the time of this forex Session, it is obvious that as a Nigerian, It is the midnight or wee hours here.
As such, it may not be the best time to trade forex in Nigeria because you may be carried away by sleep or you may not be mentally sound to take wise decisions.
The tendency that the closing hours of this Session will experience a big move is high because the closing hours overlap with the London Session opening.
So, always be on alert towards the end of this Session if you are comfortable trading forex at this hour.
London Session (European Session)
Many traders I have interacted with said that the London Session is the best time to trade forex in Nigeria. And their reason is that that is when the market moves greatly. In other words, there is usually more volume of currency in the market during the London Session.
Obviously, this Session contributes to 37% of forex turnover daily, which means there are many opportunities to tap in. The major players in this market are London and Germany.
This Session starts from 8 AM to 5 PM Nigerian time. The major currencies to trade on this Session are EUR/USD, GBP/USD, EUR/GBP, and USD/CHF.
Major trade breakout occurs in this Session, therefore it is the best time to watch out for a good entry price.
Another reason this Session is very busy is that it overlaps with New York Session by 3 hours. Therefore, the market trades two Sessions at a time for 3 hours.
Financial news and reports from the European countries such as Germany, France, and others usually cause a spike in the market during the London Session
New York Session
This session is the second largest in the world of forex. It contributes up to 17% liquidity to the market. It is one of the best times to trade forex in Nigeria because the market moves at a very large distance in this session.
The major players in this session are traders from America and Canada. By Nigerian time, this session opens by 02:00 PM and closes by 11:00 PM, which marks the end of the day trading and the beginning of a new trading day.
Since Americans and Canadians are the major players in the New York session, the volatility of the USD pairs is high. Examples of such pairs are USD/CAD, EUR/USD, GBP/USD, and GBP/JPY.
The overlapping period between the London session and the New York session provides the biggest liquidity in the market. Also, daily trend reversal or continuation usually occurs during this forex trading time.
What is Best Time to Trade Forex in Nigeria?
I will like you to understand that knowing the exact time to trade forex does not guarantee profitability. A lot of factors determine how profitable you can with trading such as money management, and your psychology of trading.
The most important thing is to define your trading purpose and stick to a strategy that works. Patience is highly needed on your own part to make it in forex trading. Always remember that the market has come to stay, therefore you should trade to survive.
Best Time to Trade Forex in Nigeria-Wrap up
So far, I hope you have understood that there are opportunities at any given time in the forex market. A very big lesson to take home here is that there are active moments on the market, which are the London and New York sessions.
To be profitable entails trading according to your own stipulated rules, and strategy. So, every time is the best time to trade forex in Nigeria provided you understand how the market works.
Also, Read [How to Start Forex Trading in Nigeria]