Just because the global foreign exchange (forex)market is open 24 hours a day, that doesn't mean every one of those hours is worth trading in.The U.S. dollar/Japanese yen (USD/JPY) tradehas certain hours that are acceptable for day trading, because there's enough volatility to generate profits that arelikely greater than the cost of the spread and/or commissions. The best day traders don't want just "acceptable hours" to trade; they want to be trading the best hours of the day—those that offer the best bang for their buck. To be efficient andcapture the largest intraday moves day traders hone in on, traders should focus only on specific hours of the day.
Activity During Trading Sessions Around the Globe
Due to global time zone differences, there is always a forex market open for business somewhere during the week. On Sunday night (in the U.S.), the Asian and Australian markets open first, facilitating trading. Then Europe opens. Then North America. So there are always traders, banks, or businesses willing to trade around the clock.
Not all globalmarkets actively trade all forex pairs or currencies, though.Therefore, different forex pairs see hiring trading activityat different times of the day.
When London is open for business, pairs that include the euro (EUR),British pound (GBP), and Swiss franc (CHF)are more actively traded. When New York is open for business, pairs that include the U.S. dollar (USD) and Canadian dollar (CAD) aremore active.
The USD/JPY pairing is a bit oddin this regard. The yen and the U.S. dollar are highly traded currencies, so this pair typically sees relatively stable action throughout the day, with a few peaks and troughs in volatility.Session times are shown at theForexMarketHourstool,which defaults to Greenwich Mean Time. You can select your own time zone (or your forex broker's time zone) instead.
Note that there is a shift due to daylight saving time. During the warmer months in the Northern Hemisphere, trading hours for New York and London slide forward an hour. When daylight saving time rolls around, if you are uncertain about when markets open and close, check the market hours tool for confirmation.
Times to Avoid Trading the USD/JPY
An hourly volatility chart shows how many pips—hundredths of a yen—the USD/JPY pair moves each hour of the day.
Price movement activity is relatively stable through much of the day, although there are periods with noticeable drops in volatility. Avoid day-trading during those low-volatility times, because if you trade then,the pip movement may not be large enough to compensate for the spread and/or commissions you'll pay to make the trade.
Trading in thispair is subdued between 21:00 GMT and the Tokyo open at 00:00 GMT, so that's not ideal for day-trading. As Tokyo winds down and before London opens, the pair sees another drop in volatility between 03:00 and 05:00. This is another time to avoid trading.
Average daily volatility changes over time, but those hours of least volatility typically do not change. To check whether other times of the day have been showing unusually low—or high—volatility, look at volatility statistics on Mataf.Click on a currency pair for an updated chart.
To see how many pips a forex pair is moving in a typical day, apply an average true range (ATR)indicator to a daily chart. If the ATR is set to 15, the ATR will show the average daily volatility over the last 15 days.
Ideal Times to Day-Trade the USD/JPY
If you are able to, day-trade the USD/JPY between 12:00 and 15:00 GMT. London and New York are both open for the bulk of this period. Even though Tokyo isn't open, this three-hour window typically presents the largest price moves of the day.(Sometimes volatility remains high for another hour, until 16:00, for a four-hour window.) This means greater profit potential, and spreads are also typically tightest during this time.
The bottom line is trading between 12:00 and 15:00 maximizes your efficiency in trading the USD/JPY. This period often provides the most opportunities to deploy trading capital, as the increased volatility provides more opportunities to trade.
There may occasionally be other times that produce good-sized moves for weeks or months at a time. Regularly check volatility statistics on Mataf to see what times of day are most active. Since the USD/JPY is actively traded around the clock, there may be some other times you can take advantage of.
Other Currency Pairs to Trade
If you can't trade during the most active times in the USD/JPY, then look at trading other pairs, such as the euro/U.S. dollar (EUR/USD) or British pound/U.S. dollar (GBP/USD), that might offer better opportunities for you.
Frequently Asked Questions (FAQs)
How do you trade the USD/JPY pairing?
To trade USD/JPY or any other forex paring, you'll need access to a forex brokerage account. Some stock brokers also give you the ability to trade forex. You may need to seek out a specialized account with a broker that focuses on forex markets.
What would you expect to happen to USD/JPY if interest rates go higher?
When interest rates increase, you earn more money for the currency you save in a bank account. If one currency raises rates and another doesn't, then the rate hike increases the currency's value. If you can get more money by storing cash in dollars rather than yen, more people will want to trade yen for dollars, and the dollar's relative value will increase.
FAQs
In conclusion, the best time to trade USD/JPY in EST is during the most active trading hours, which are from 8:00 AM EST to 5:00 PM EST. However, traders should also consider other factors such as economic news and events, market sentiment, and their trading style when determining the optimal trading time.
What is the best time to day trade the GBP JPY forex pair? ›
Generally, a good time to trade GBP/JPY is when the markets in London and Tokyo are both open – between 8am and 9am (UK time).
What is the best time frame for day trading forex? ›
From experience, I can tell you that two of the best time frames to trade are the daily and 4-hour. This isn't to say that you can't be profitable trading a different time frame, but these two are what made me profitable as they work the best with the price action strategies I use.
What time is the USD JPY trade? ›
USD/JPY trading hours
The forex market is available 24 hours a day, but UK trading, in particular, tends to get active from 8:00 AM and taper off from 5:00 PM. Of course, there will be times during the day when this currency pair experiences higher volumes - typically around major market announcements.
What is the best time of day to trade forex pairs? ›
The forex market runs on the normal business hours of four different parts of the world and their respective time zones. The U.S./London markets overlap (8 a.m. to noon EST) has the heaviest volume of trading and is best for trading opportunities.
What's the best time to trade GBP/JPY? ›
From 08:00 am to 5:00 pm, the GBP/JPY is usually busy (GMT). This currency pair undergoes higher volumes during the day but is more active during this period which often provides the most opportunities to deploy trading capital.
Is USD JPY a good pair to trade? ›
The USD/JPY pair is one of the major currency pairs in the forex market and is widely favoured by traders due to its high liquidity, volatility, and low spreads.
What time frames do most day traders use? ›
A day trader could trade off of 15-minute charts, use 60-minute charts to define the primary trend and a five-minute chart (or even a tick chart) to define the short-term trend.
What are the best times of day to day trade? ›
The best times to day trade
Day traders need liquidity and volatility, and the stock market offers those most frequently in the hours after it opens, from 9:30 a.m. to about noon ET, and then in the last hour of trading before the close at 4 p.m. ET.
What time frame do swing traders use? ›
Most swing traders use daily charts (like 60 minutes, 24 hours, 48 hours, etc.) to choose the best entry or exit point. However, some may use shorter time frame charts, such as 4-hour or hourly charts.
USDJPY Carry Trade Strategy
This involves borrowing to buy another currency to profit from their interest rate differential. For instance, if the US dollar has a higher interest rate than the Yen, a trader might take a short position on USDJPY — that is, selling the US Dollar and buying the Japanese Yen.
How to trade the USD JPY? ›
Currencies trade in pairs. This means that you will always go long (buy) one currency to go short (sell) the other. This will correspond with the first currency (known as the base currency). So to go long the USD/JPY would be to buy Dollars and sell Yen.
What is the USD JPY pair in forex? ›
USD/JPY is the forex ticker that shows the value of the US Dollar against the Japanese Yen. It tells traders how many Yen are needed to buy a US Dollar. The Dollar-Yen is one of the most traded forex pairs - second only to EUR/USD - and is a benchmark for Asian economic health and even the global economy.
Which pairs to trade at night? ›
Major forex pairs, such as EUR/USD (Euro/US dollar), USD/JPY (US dollar/Japanese yen), and GBP/USD (British pound/US dollar), remain attractive options for night trading due to their liquidity and stable price movements. As these are the most traded pairs in forex, many market participants favour them.
What is the best time of day to trade GBP USD? ›
The best time for trading GBP/USD is when both UK and US markets are open for trading. This is from 8:00 AM to 10:00 AM GMT and from 12:00 pm TO 15:00 PM GMT. This is when the greatest market moves occur and when spreads are at their lowest.
What is the best session to trade GBP? ›
During London session, major forex pairs are the most traded such as GBP/USD, EUR/USD and the EUR/GBP cross. The Tokyo- London session includes lower volumes and liquidity than the London New York session as it trades for fewer hours.
What is the daily forecast for GBP JPY? ›
GBP/JPY Daily Outlook
Intraday bias in GBP/JPY remains neutral and outlook is unchanged. Consolidation from 193.51 is extending but further rally is expected as long as 190.02 support holds. On the upside, break of 193.51 will resume larger up trend to 195.86 long term resistance.
Is GBPJPY a good pair to trade? ›
The GBP/JPY is one of the most widely traded forex pairs. A lot of traders actually prefer it to the major pairs, because of the potential it provides. It's popular with both technical and fundamental traders. The pair's range easily surpasses a hundred pips on most days.
