South African investors know the lucrative opportunities of trading forex. Aside from its volatility, another interesting and profitable feature of the forex market is its around-the-clock operation.
However, with this 24/5 operation, many South African and global forex traders fell into the accessibility trap. They thought that just because the market was readily available, they could enter and profit from it anytime they wanted.
In this article, you’ll discover the different trading sessions and the best time to trade forex in South Africa. Read on and boost your chances of profiting from the forex market.
Table of Contents
What Are the Forex Trading Hours?
In the financial market, the trading hour is defined as the specific period when security assets are bought and sold.
The forex market hours are around-the-clock; it operates 24 hours a day, during the weekdays. This accessibility nature of the forex market enables South African and other global traders to trade currency pairs all days and nights—unless it’s weekend.
But what makes the forex market operate around the clock?
Well, it’s primarily because of the operation of the three major forex sessions, which are:
- Tokyo Trading Session
- London Trading Session
- New York Trading Session
Knowing the basics of these trading sessions would help you find the best time to trade forex because it tells you the most active and illiquid hours for the forex market.
When Is the Best Time to Trade Forex in South Africa?
While there is no ultimate rule that tells you the most optimal time to trade forex, there is one effective way to ensure that you’re properly trading the forex clock.
“What’s that?” you might ask.
That’s by trading the overlapping sessions. Logically, when two different sessions overlap, the market volume during the overlapping hours increases, making the market active. And naturally, an active market is the most profitable window to trade forex because it brings volatility.
Here are the three common overlapping sessions in forex:
| Overlapping Session | SAST |
|---|---|
| Tokyo and London | 9:00 AM to 11:00 AM |
| London and New York | 2:00 PM to 6:00 PM |
Remember, you can make a profit when the market appreciates; you can even make more profits if it depreciates. What would hinder you from profiting is when the market doesn’t move at all—so don’t trade when the forex market is not active.
London Session Time in South Africa
| SAST | 9:00 AM to 6:00 PM |
The London trading session is the most significant forex session in the market. And luckily for South African forex traders, this trading session is the most convenient to trade in because the time zones of both countries are close to each other.
This resulted in South African traders being widely active during the London session.
When you’re trading this session, almost all currency pairs are active, but most of the majors and GBP- and EUR-denominated minor pairs.
Remember, if you trade this session properly, you’ll have a high chance of yielding profitable returns.
New York Session Time in South Africa
| SAST | 2:00 PM to 11:00 PM |
The New York trading session brings the second-largest market volume to the forex.
In the New York trading session, the forex market experiences a spike in its liquidity and volatility especially because of the profitable and safe-haven appeal of major pairs during this session.
When you’re trading this forex session, make sure you follow a sound risk management technique because of increased volatility and the strong possibility of market reversal.
Note: The starting hours of the New York trading session are the best four-hour window in the forex market. This is when the London and New York trading sessions overlap, bringing even more market volume and volatility to the market.
Tokyo Trading Time in South Africa
| SAST | 2:00 AM to 11:00 AM |
The Japanese yen (JPY) is the third most heavily traded currency in the world, following the US dollar and the Euro. With this, many individual and institutional investors look forward to the Tokyo session to trade JPY-denominated pairs.
This reason makes the forex market liquid and volatile during the Tokyo trading session.
Aside from that, several Asian financial centers operate during this window. The international transactions between the financial centers drive up the market volume during this session.
However, remember that this session is considered the least volatile compared to the London and New York sessions. However, this nature provides opportunities for beginner and cautious traders. Because it is less volatile, the traders during this session have a clear entry and exit level and reference because the price usually swings around the asset’s support and resistance.
Also, this trading session is known for its quiet yet moving nature. Thus, trading the Tokyo session still brings several opportunities to the table. Also, you get to thoroughly manage your trade’s risk and risk ratio because the market gives you enough breathing room to monitor and act upon your trade.
Frequently Asked Questions
What Time Does the Market Open in South Africa?
The forex market open on Sunday at 11:00 PM in South Africa; following the Sydney trading session. It then closes on Friday at midnight once the New York trading session closes.
How Do the Forex Trading Hours Operate?
The forex trading hours are made possible due to the operation of the major forex trading sessions, like the Tokyo, London, and New York.
The trading sessions of each city align with their respective business hours.
What Are Overlapping Trading Sessions?
As the name suggests, an overlapping session refers to the window of the market where two trading sessions are open at the same time.
When two sessions overlap, the market experiences a heightened trading atmosphere—resulting in high trading volume and activities.
What Are the Best Days of the Week to Trade Forex?
The best of days of the week to trade forex in South Africa is during the mid-week, or on Tuesdays, Wednesdays, and Thursdays.
