One key factor among others when it comes to Forex trading is the selection of proper trading hours. Understanding the Forex trading sessions and comparing time zones between different countries and financial centers can help South African traders consistently beat the FX markets. In this guide, we are going to delve into the timing aspect of Forex trading and define the best trading hours for South Africans.
Understanding Forex Trading Hours
The most important thing in Forex trading hours together with time zones are Forex market sessions. While all other trading assets have their trading hours, the Forex markets are open 24/5 making it possible to trade without interruptions and time limits. But despite this flexibility, there are different markets open at different hours of the day which are characterized by unique price movement patterns, liquidity, and volatility. Before we start discussing the exact ways to find the best trading time in South African time we should understand what sessions are and how they affect the Forex markets.
Forex market sessions
There are three Forex market sessions called the Asian, European, and American sessions respectively. The Asian session starts with the Sydney session and is later followed by the Tokyo session where Hong Kong and Singapore also start their active hours. Despite these many important financial centers being part of the market the overall liquidity and volatility are still low for the Asian market. Because of these reasons, the Sydney session time in South Africa is not the best time to trade as it has lower volatility than other sessions.
After the Tokyo session, the next session that starts is the European or the London trading session. The London session is known for more movements and more opportunities in FX markets as the volatility and liquidity increase. Also, more liquid markets should indicate lower volatility. The increased trading activities during the London sessions make this session more volatile and many traders target this session for bigger profits. After the London session, the New York session starts and these two sessions greatly overlap during the trading day. The most volatile market known for violent movements in FX markets is accepted to be the overlapping London and New York sessions as the number of traders and participants reaches a peak during these sessions. For finding the best time to trade Forex South Africa can be one of the few places in the world that almost overlaps the London session active hours. This is especially important for traders to achieve maximum performance as they can start trading right in the morning. The time zone of South Africa is GMT + 2 while the time zone for London is GMT + 1. This gives South African traders a great opportunity to match their trading activities to the London session and trade the market during its peak volatility. To trade the New York trading session time in South Africa solely is not recommended as the mind is not as sharp during the night as it is during the day.
The importance of opening and closing hours of trading sessions
For finding the best Forex market open time South Africa is again one of the few lucky countries which have almost the same time as London and its traders can target the best session opening hours. London opens at 9 am South African time and lets traders from Africa trade markets like it was a regular job. But Forex can be a much better business than a regular job and when enough effort has been put into practice can let traders make much more than an average job. When sessions open it is usually the most active and volatile part of the session and it is important to monitor closely how the price behaves, which can be done using different tools and special robots. The start of the London session usually defines the trend for the rest of the day and South Africans can enjoy the luxury of 9-6 trading hours. The New York session which overlaps with the London session opens at 2 pm and usually continues the London trend and adds to its liquidity and volatility.
The best hours to trade Forex in South Africa
The sharp mind is critical in Forex as the trading process is very logical and requires greater attention to details and monitoring news and other important information before opening any trading position. The importance of market overlap for increased trading opportunities can not be underestimated and South African traders too, should try to match their trading activities to that of London and New York session overlap. Which starts at 2.00 pm and continues till 6 pm in the evening. These are the perfect hours when traders in South Africa can sit and stare at the charts to find inefficiencies in the FX market and capitalize on them. Starting to trade between 2 and 6 pm is not only the best FX trading time in South Africa as traders can start trading from the London session opening which is at 9 am, a perfect time for morning persons. It is very advisable for any FX trader to try and trade markets during these hours and South Africa is the luckiest as their time zone coincides with the London time zone enabling them to trade during the day when the mind is the most alert and sharp.
Before we can name the best FX trading time in South Africa we have to identify the best trading sessions and then try and trade during the most volatile and liquid sessions. The London session and New York sessions are very liquid and more volatile than others and offer multiple opportunities for traders to take advantage of market inefficiencies. The best time to trade FX markets is when London and New York sessions overlap giving the traders peak volatility and liquidity because of increased trading volume and activity. These are the trading sessions that best South African traders trade at. For selecting the best trading hours South Africa is a very attractive country as its time zone coincides with London time. Because of this, South African traders can approach trading business as a standard job and trade during working hours. It is not recommended for African traders to trade Asian sessions as there is a night in South Africa when these markets are active and trading with a tired mind is the last thing any trader wants to do.
FAQs on the best Forex trading hours in South Africa
Should you trade Forex in South Africa during Sydney session?
The Sydney session starts early in the morning when it is still night in South Africa. Sydney starts at 11 pm in the evening. Since Forex trading is a very logical and complex business it is not advisable to trade the markets during the night, and since the Sydney session starts this late traders from South Africa should try to avoid this session. This argument is further solidified by the fact that liquidity and volatility can be lower during the Sydney session making it more challenging to find trading opportunities. The South African time zone coincides with the London session perfectly where the activity and volatility reach their peak offering many inefficiencies traders can take advantage of. As we have discovered earlier, for finding the best FX trading hours South Africa can be a perfect place as its time zone is close to the London time zone.
What is the best day to trade Forex in South Africa?
Since the Forex market unlike other financial markets is open and active 24/5, any day can be a proper trading day. What’s important is to select the right trading sessions and the best trading hours from these sessions. The London and New York sessions are known to be the most liquid and volatile sessions where prices can cover great distances giving South African traders the needed edge to beat the markets. The best trading hours on any trading day would be between 2 pm and 6 pm in South African local times as they coincide with one of the most active market phases.
What hours can you trade Forex in South Africa?
Forex unlike other financial markets like stocks or options can be traded 24/5, meaning South Africans can trade at any time during the day. But the important factor is to try and trade when the mind is most alert. The time between 9 am and 6 pm are the best South Africa trading hours.