Forex trading operates 24 hours a day during the week, but not all hours are equally favourable. In the Chinese timezone (CST, GMT+8), the best time to trade forex is when market activity is at its peak. This typically happens when trading sessions overlap, as higher liquidity leads to tighter spreads and more trading opportunities.

Understanding Forex Market Sessions

The forex market is divided into four main trading sessions:

1. Sydney Session (10:00 PM – 7:00 AM CST)
   • The Sydney session is quieter compared to others, with less liquidity. It is most relevant for AUD and NZD pairs.
2. Tokyo Session (9:00 AM – 6:00 PM CST)
   • The Tokyo session aligns with Asian markets, making it significant for JPY pairs and other Asian currencies. It can provide steady trends but typically has lower volatility.
3. London Session (4:00 PM – 1:00 AM CST)
   • The London session is one of the most active trading periods, influencing major currency pairs like EUR/USD, GBP/USD, and EUR/JPY.
4. New York Session (9:00 PM – 6:00 AM CST)
   • The New York session overlaps with the London session from 9:00 PM to 1:00 AM CST, creating the highest liquidity and trading opportunities.

Best Times to Trade Forex in China

1. London–New York Overlap (9:00 PM – 1:00 AM CST)

• Why Trade?
  • The overlap between the London and New York sessions is the most active period in the forex market. Major pairs like EUR/USD, GBP/USD, and USD/JPY see significant price movement.
  • Liquidity is highest, resulting in tighter spreads and better trade execution.

2. Tokyo–London Overlap (4:00 PM – 6:00 PM CST)

• Why Trade?
  • This overlap is quieter compared to the London–New York overlap but provides opportunities for trading Asian and European currencies like EUR/JPY and GBP/JPY.
  • Traders can expect moderate volatility, especially in JPY and EUR pairs.

3. Early Tokyo Session (9:00 AM – 12:00 PM CST)

• Why Trade?
  • The early Tokyo session is ideal for trading JPY pairs and other Asian currencies. Market activity increases as the Tokyo stock market opens.
  • It provides opportunities for traders who prefer steady trends and reduced volatility.

Tips for Chinese Traders

1. Focus on Major Pairs: Major currency pairs like EUR/USD, GBP/USD, and USD/JPY are the most liquid, offering better trading conditions.
2. Consider Economic Releases: Monitor major economic announcements during active hours. For example, US Non-Farm Payrolls are released during the New York session and can cause significant volatility.
3. Adapt to Your Strategy: Scalpers might prefer highly liquid periods (e.g., London–New York overlap), while swing traders may opt for more stable times (e.g., Tokyo session).

Conclusion

The best time to trade forex in the Chinese timezone is during the London–New York overlap (9:00 PM – 1:00 AM CST), as it offers the highest liquidity and volatility. However, the Tokyo–London overlap (4:00 PM – 6:00 PM CST) and the early Tokyo session (9:00 AM – 12:00 PM CST) also provide excellent opportunities for specific currency pairs and strategies. Tailor your trading hours to your strategy and the currency pairs you prefer for the best results.