Best Time to Day Trade the EUR/USD Forex Pair

Best hours of the day to day trade the EUR/USD

The allure of forex day trading is that you can trade 24-hours a day, unfortunately that doesn't mean you should. Day traders should only trade a forex pair when it's active and there's lots of volume and transactions occurring. The EUR/USD has certain hours which are acceptable for day trading because there is enough volatility to generate profits which are likely greater than the cost of the spread and/or commission. To be efficient and capture the largest moves of the day, day traders hone in even further, only trading during a specific three hour window.

Day Trading Sessions and Impact on Volatility

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Global forex sessions, GMT.. VantagePointTrading.com

The forex market operates 24-hours a day during the week because there's a always a global market open somewhere due to time zone differences, but not every global market actively trades every pair. Therefore, different forex pairs are actively traded at different times of the day. 

When London (and Europe) are open for business, pairs that involve the euro (EUR) or British pound (GBP) are more actively traded. When New York (U.S. and Canada) are open for business, pairs that involve the US dollar (USD) and Canadian dollar (CAD) are more active. 

If day trading the EUR/USD, the times that are likely to be most active for the pair, on average, will be when London and New York are open, according to the times on the attached chart. These times are GMT. To convert to your own time zone (or your forex broker's time zone), use the forex market hours tool available here: http://www.forexmarkethours.com/markethours.php

Acceptable Times to Day Trade EUR/USD

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Acceptable hours to day trade, between 0600 and 1700 GMT.. VantagePointTrading.com

The hourly volatility chart shows how many pips the EUR/USD moves each hour of the day. Times are in GMT.

There is an increase in the amount of movement starting at 0600, which continues through to 1700. After this, movement each hour begins to taper off, so there are likely to be fewer big price moves day traders can participate in.

Day Traders should ideally trade between 0600 and 1700 GMT. Trading outside of these hours the pip movement may not be large enough to compensate for the spread and/or commissions

Volatility changes over time. For example, daily average volatility at the time of writing is 60 pips per day. Daily average movement could increase to 100 pip per day, which means each hour is likely to see slightly higher pip movement. Which hours are most volatile generally do not change though. 0600 to 1700 will continue to be the most acceptable time to day trade, regardless of whether daily volatility increases or decreases. 

As a general rule, only day trade during hours where the price is moving at least 10 pips or more (preferably more).

For currently hourly volatility stats, see VantagePointTrading.com/Daily-Forex-Stats.

Ideal Times to Day Trade EUR/USD

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Most volatile three hours of the day in the EUR/USD, from 1200 to 1500 GMT.. VantagePointTrading.com

0600 to 1700 is an acceptable time to day trade the EUR/USD. There is adequate movement to potentially extract a profit and cover spread and commission costs. 

If you are able to though, day trade the EUR/USD only between 1200 and 1500 GMT. This will maximize efficiency. During this period you'll see the biggest moves of the day, which means greater profit potential, and the spread and commissions will have the least impact relative to potential profit.

Also, London and New York are both open during this three hour window. That means a lot of volume coming in from two major markets, so spreads are typically tightest during this time. 

Looking for a day trading strategy to to trade during these times? Check out the Engulfing Candle Day Trading Strategy

Best Time to Day Trade the EUR/USD

Not everyone is a full time day trader and therefore can't choose when they trade. If you can't trade during the ideal window of 1200 to 1500 GMT, then day trade the EUR/USD at some other point between 0600 and 1700 GMT. Trading during these times, especially during the three hour window, maximizes profit potential due to the size of the moves and spreads are typically lower during these times as well.

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