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- What Is the Best Time of Day to Trade?
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- What Is the Best Time of Day to Trade?
- Economic data is released at scheduled times
- Institutions trading during business hours
- Retail traders are more active during specific sessions — in terms of volume and location.
- Lower liquidity
- Range-bound behaviour
- Risk of false breakouts
- Large institutional flows
- Strong trends can begin
- Overlaps with NY for 2 hours
- Major economic releases
- US equity open creates short-term momentum
- Slower into the late session
- Early session: bursts of volatility and institutional positioning
- Mid-session: consolidation or retracements
- Late session: thinning liquidity, profit-taking, fakeouts
- Breakouts work 7am–10am GMT
- Mean reversion thrives 2am–5am GMT
- Reversals occur more often post-3pm GMT
- “Only take trend trades between 7am–11am GMT”
- “No breakout entries after 3pm NY”
News & analysisNews & analysisMost traders obsess over entries, indicators, and setups, but often overlook a simple factor — the time of day that you trade.
Time of day affects volatility, liquidity, and when new information enters the market.
Ignoring it can turn good setups into frustrating inactivity, or even losses, while embracing it can help you trade with the market, not just the setup.
Why Time of Day Is Important
Markets are not equally active during the whole period they are open. Price action is driven by human behaviour, either on an individual or organisational level.
Behaviour commonly follows routines:
This invariably creates rhythms in the market. By learning to trade with these rhythms, your trades will often require less confirmation, you improve stop placement, and have cleaner follow-through on trading ideas.
The Global Trading Clock
The trading day is broadly broken into three main sessions: Asia, Europe, and the US. Each has its own “character,” and benefits vary based on which time zone best aligns with your strategy.
1. Asia (Tokyo)
10pm –7am GMT: Markets are generally quieter except JPY and AUD FX pairs and index CFDs.
Common characteristics include:
Reversion strategies may do well in such market conditions as well as setting up highs and lows, which may be useful references for sessions later in the day.
2. Europe (London)
7am–4pm GMT: Increased volatility and volume are seen during the European session across many asset classes. The opening of the LME can influence metals prices, and US futures may respond accordingly to increased volatility.
Common characteristics include:
Breakout strategies using Asian session highs or lows as reference (or previous days’ US session) may outperform. And trend continuation and reversal approaches on the back of new data coming out of Europe may also be common.
The two-hour crossover with the subsequent US session can also be an important change in market conditions.
3. US (New York)
12pm–9pm GMT: Volatility spikes may occur at US equity market open and significant data releases with global asset class impact are often released at 8.30am US Eastern time.
Common characteristics include:
Fast moves might be prevalent early in the day, suggesting short-term momentum-supported new trend set-ups may outperform. Reversals around the middle of the day are also not uncommon.
The Federal Reserve interest rate decisions are always in the early afternoon in the US, which can flip market sentiment.
The Intra-Session Rhythm
It is not only session-to-session changes that can often be seen on price charts. Within each session, price often has a tendency to move in waves. So, as a general rule, you may see:
Why Most Traders Miss This
During strategy development, many strategies are tested on charts without considering what time the setup occurred.
A 15-minute candle during the London open isn’t the same as one during the Australian lunch break.
So, if you start taking breakouts in low-volume periods, trading reversals just before news, or entering trends during midday doldrums, these may have less chance of meeting the goals for that particular trade.
How to Use Time of Day as a Filter Practically
1. Mark Your Session Windows
On your chart, visually block out the London open, NY open, and overlap. Use vertical lines or shading — this will help you historically see what happens at these key times.
*Note: We are developing a free indicator for this that you can place on a chart. Email [email protected] if you are interested.
2. Backtest by Session
You can split potential trades by session ‘time blocks’ that look back over time. Strategy types often work better during specific hours:
Using your existing setups (or even previous trades), look at a sample to see what may have happened.
3. Add Time as a Trade Filter
Once you have some evidence from, test out simple rules like:
If you can code (or have access to someone who can), then you can backtest this quickly to see the impact of these filters.
4. Know the News Calendar
Most high-impact data is released at predictable times — make knowing what is happening and when part of your daily trending agenda. These contribute to the characteristics of a session, but also may flip what is standard on its head.
Reference in your plan the major data points and how you are going to manage potential entry setups.
Trade With the Market — Not Just the Setup
The best trades don’t just have good structure; they also happen at the right time.
Logically, if you want cleaner trade setups, high-probability entries, and improved consistency, then aligning your trading strategies with the market clock makes sense.
It’s a simple shift that most traders ignore — perhaps to their detriment. Finding the best time of day to trade for your trading strategy could be one of the things that helps develop your trading edge.
Ready to start trading?
The information provided is of general nature only and does not take into account your personal objectives, financial situations or needs. Before acting on any information provided, you should consider whether the information is suitable for you and your personal circumstances and if necessary, seek appropriate professional advice. All opinions, conclusions, forecasts or recommendations are reasonably held at the time of compilation but are subject to change without notice. Past performance is not an indication of future performance. Go Markets Pty Ltd, ABN 85 081 864 039, AFSL 254963 is a CFD issuer, and trading carries significant risks and is not suitable for everyone. You do not own or have any interest in the rights to the underlying assets. You should consider the appropriateness by reviewing our TMD, FSG, PDS and other CFD legal documents to ensure you understand the risks before you invest in CFDs. These documents are available here.
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