The two best times of day to trade Forex (and when not to)

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If you are spread betting on Forex there are two times when the market is potentially most liquid and certain times when you really shouldn’t be trading at all.

The two best times of day to trade Forex is when everyone else is.  This is because the better the liquidity, the better orders are filled and there is some momentum and trend to the intra-day market.

The two best times are generally after the other financial (stock/commodity/fixed income) markets open in London and New York.  To a lesser extent, the markets are also more liquid around the close.

Throughout the rest of the day, the best spread betting brokers like ETX Capital will always have good liquidity for traders (IG even offers partial fills in forex spread betting).  But you can compare the services of all the Forex spread betting brokers in the UK on our comparison tables.

The absolute worse time of day to trade Forex is just before economic figures like the ECB rate decision or the non-farm payrolls are announced.  The markets are always fairly illiquid some time before are forex traders flatten positions.

Economic figures can seriously move the market with very thin volume.  If you are trading the FX futures listed on the CME (you won’t through spread betting or CFDs) liquidity can be next to zero as bids and offers are pulled above and below the market.

This will then be replicated in the prices quoted by the spread betting firms. After all the top spread betting firms tend to try and hedge all positions nowadays.

This means you can end up getting stopped out through your price with bad slippage (unless you are using a spread betting guaranteed stop).  Economic figure releases also skew trends and make the market very unpredictable.

If you are trading the forex market in the short term (intra-day) it makes more sense to stick to the most liquid pairs and market hours.  If you take a longer-term view there are always opportunities int he exotic forex pairs.  Just beware the more exotic the wider the spreads.

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Richard started the Good Broker Guide in 2015 and has been a broker for 20 years most recently at Investors Intelligence and previously a multi-asset derivatives broker at MF Global (Man Financial). Richard started his career working as a private client stockbroker at Walker Crips and Phillip Securities (now King and Shaxson) after interning on the NYMEX oil trading floor in New York and London IPE in 2001 & 2000.