Best Time to Trade Forex in South Africa
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The uniqueness of the forex market structure sets it apart from other assets. For example, the Johannesburg Stock exchange is operational Mondays to Friday from 9 am to 5 pm South African Standard Time (GMT +02:00), but the answer is unclear when discussing forex.
Even though it is great for traders that the market is operational 24/5, the best trading time for forex is before work or at the day’s end. Just like New York never sleeps, neither does forex.
From London to New York, the speculation of forex trading of price movements of currency pairs is a never-ending process. Therefore, we will divide the Forex market day trading into three sessions representing the main money centres.
Depending on the active participation of traders, the best time to trade in forex relies on how active a market is around the world. The fluctuation in the price movement is what motivates the Forex trader.
Each Forex market around the world is distinctive:
Each Forex market is defined by its individual behaviour. The character of each market has its pros and cons. For instance, liquidity is poorest during the Asian sessions, and less trigger or unpredictability is noticed.
The volatility happens when the London Stock Exchange opens. Overall in Europe, liquidity is deeper when volatility strikes the European markets.
Finally, when North America opens, it brings with itself a massive pool of fluidity. As a large amount of money is present in the market, there is less spillage.
The best time to trade Forex in South Africa concentrates on when the trading activity is high in different markets.
The chart above mentioned nicely exemplifies the dynamics with the Rate of Change of the ATR and Average True Range employed to an hourly EUR/USD chart.
Look closely at the regular cycles; the price spike becomes volatile when London opens up, reaches the uttermost point, and starts to drop after the North American market starts its proceedings and finally bottoms out during the Asian session.
The 8-hour pivot:
Adaptability to different financial centres is important. This is the crux of the 8-hour pivot. The rationale is unassuming. If the price is trading above the pivot, then the feeling is bullish, but sentiments are bearish if the price is below the pivot.
You don’t need to trade the breaks of the pivot. Use it as guidance. However, some details cannot be disregarded. Daily at rollover time, i.e., 5 pm New York time, you will be incapable of trading for a short period. Depending on how the broker will react to the situation, the closer you get to roll over time, the spread on different currency pairs might be broader than normal. The spread widens up to 10 pips on Eur/USD than normal.
It is risky and impractical to place trades close to rollover time, specifically if a tight stop loss is used.
All market sessions are unequal. It is better to trade up to 30 minutes before rollover or wait for 30 minutes after rollover for safety precautions. There is hardly any volatility, so waiting for 30 minutes is not going to make much difference.
Best time to trade forex in South Africa:
In South Africa, you should not be trading in times because of lower volatility and higher spreads. This time is when the market opens and closes at either 23:00 (between March and November) or 00:00 (between October and March).
But if you are not scalping, then liquidity and time zones will be of less importance. On the contrary, position trading is a matter of concern with positioning and sentiments rather than trading at precise hours.
You need to stray slightly and talk about Daylight Savings with the rollover hour in mind. When the US session closes at 17:00 during the winter, it is midnight in South Africa. During the summertime, when the US market closes, it is 23:00 in South Africa.
If the duration of the trading timeframe is longer, more weight fundamentals should be present in the trading plan, and smaller weight technical analysis time zones will have.
Undoubtedly, traders need to monitor their charts to access any price variation in the market. However, the chances of profit are much higher if you keep abreast of the time.
Depending on the goals of the Forex trader, a short timeframe and a long time frame are chosen. If you want quick profits, then a short timeframe is the best. If not, then you have to opt for a longer time frame.
The time frame to conduct forex is an important element for any trader. First, the trader needs to identify the market when the volatility is at its maximum.
Choosing the right time to trade Forex in South Africa is critically vital to avoid risks and gain profits. All markets being unequal, the trader must better understand the types of time frames and then choose the most suited time frame. This is quite obvious for any trader.
The complication in the Forex market is much higher; traders need to closely opt for the best time for their trade. In South, Africa traders choose an adequate time to fulfil their objectives. The truth of the matter is that traders can place their trade on a weekly chart.
The majority of traders want to monitor the fluctuations in the price. It is highly advisable to opt for a short timeframe if you are fully aware of capital management and its risks.
But this comes at a price. People who are new to forex should avoid short-term trade as higher risks are involved. However, it is sensible to opt for a longer timeframe if you opt for the long-term strategy.
Remember, no fluke is involved. The best strategy eventually ends up winning the race. For that, you need to spend some quality time with the right trader and learn how to set off time constraints.
Jason Morgan is an experienced forex analyst and writer with a deep understanding of the financial markets. With over 13+ years of industry experience, he has honed his skills in analyzing and forecasting currency movements, providing valuable insights to traders and investors.
Forex Content Writer | Market Analyst