Best Currency Pairs to Trade at Night in 2024
When trading Forex at night, consider focusing on the following currency pairs for increased volatility and trading opportunities:
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AUD/NZD - The Australian Dollar/New Zealand Dollar pair offers potential opportunities during nighttime trading sessions, particularly for traders looking for cross rates that don't involve the USD
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AUD/JPY - The Australian Dollar/Japanese Yen pair tends to exhibit heightened price movements at night, making it an attractive option for traders seeking volatility
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NZD/JPY - The New Zealand Dollar/Japanese Yen pair is another Asian cross rate that can provide increased trading opportunities during nighttime sessions
Are you looking for the best Forex pairs to trade at night in 2023? In this article, a team of experts will provide you with valuable insights on how to enhance your trading performance during nighttime trading sessions. Designed specifically to assist traders, the experts at TU will unveil the top Forex currency pairs that offer lucrative opportunities during the night hours.
What are currency pairs?
A currency pair is a representation of two distinct currencies, with the value of one currency quoted against the other. Each pair consists of a base currency and a quote currency. The base currency is the first currency in the pair, while the quote currency is the second.
To illustrate, let's consider the example of the EUR/USD pair. The bid price of 1.302 signifies that 1 euro is worth 1.302 U.S. dollars, while the ask price of 1.503 implies that 1 euro can be purchased for 1.503 U.S. dollars. These currency pairs allow traders to compare the value of different currencies and determine how much of the quote currency is required to acquire one unit of the base currency. It is important to note that currencies are identified by their ISO currency codes, such as USD for the U.S. dollar. Among the most traded currency pairs is the EUR/USD pair, where traders buy euros and sell U.S. dollars when engaging in trading activities.
EUR/USD pair
Currency pairs classification
Currency pairs classification
Major currency pairs:
Major currency pairs, commonly referred to as "majors", are the most frequently traded currency pairs and involve the U.S. dollar as either the base or quote currency. These pairs offer high liquidity and tight spreads, presenting numerous trading opportunities. The seven major currency pairs include examples such as EUR/USD, USD/JPY, GBP/USD, USD/CHF, USD/CAD, AUD/USD, and NZD/USD. New Forex traders often begin with major pairs due to their liquidity and lower spreads
Crosses:
Crosses, also known as minor currency pairs or cross-currency pairs, do not include the U.S. dollar. They consist of two major currencies and are less actively traded compared to major pairs. Crosses have slightly wider spreads and lower liquidity but still offer potential trading opportunities. Examples of cross currency pairs include EUR/GBP, GBP/JPY, and EUR/CHF. Crosses are suitable for traders with some experience who are seeking additional opportunities beyond the major currency pairs
Exotic pairs:
Exotic currency pairs involve major currency pairs with the currency of an emerging or thinly-traded market. These pairs have less liquidity, wider spreads, and higher volatility, making them riskier to trade. Exotic pairs such as USD/SGD, USD/HKD, and EUR/TRY are examples of this category. Experienced Forex traders who understand the risks associated with less liquid and more volatile markets may consider trading exotic pairs for potentially higher returns, but caution and expertise are necessary
What are Forex night trading hours?
Forex night trading hours pertain to the time period during which trading activities take place after the regular trading session of an exchange has ended and before it resumes. These hours can differ depending on the specific exchange being considered. Overnight trading allows investors to execute trades during off-market hours, enabling them to react to global events and economic developments that may impact currency values.
It is crucial for traders to be aware of the specific night trading hours of the exchanges they are interested in and the corresponding currency pairs available for trading during these times. This knowledge allows traders to effectively plan their trading strategies, identify potential market gaps or price fluctuations, and adapt their approach accordingly. Additionally, traders can also consider the overlap of trading sessions between different regions, such as the Asian, European, and North American sessions, as these overlaps can offer heightened trading activity and increased liquidity.
Overall, Forex night trading hours offer traders the flexibility to participate in the Forex market beyond regular trading hours. It is important for traders to stay informed about market schedules, global events, and economic indicators that may influence currency values during these periods, enabling them to make informed trading decisions and potentially capitalize on market opportunities.
Is overnight trading a good idea?
According to experts, overnight trading can enable the following:
Flexibility:
Overnight trading offers the flexibility to trade at your convenience, not limited to regular market hours. This is advantageous for individuals with busy schedules who struggle to find time for trading during the day
Market analysis:
Analyzing market performance during the day allows for informed trading decisions during overnight sessions. Utilizing market trends and analysis can lead to more strategic decision-making
Order modification:
It allows for the modification or cancellation of orders during non-trading hours, providing the freedom to adjust positions based on changing market conditions or personal preferences
Global event impact:
Overnight trading also enables traders to capitalize on global events that occur outside of regular trading hours, such as economic releases or political decisions. This allows for timely actions, such as selling stocks affected by negative events or investing in companies likely to benefit from positive developments
Lower competition:
Generally, night hour trading has less competition due to fewer active traders in the market. This can create opportunities to exploit market inefficiencies and potentially generate profits
Diversification:
Including overnight trading as part of a diversified trading strategy helps manage risks and spread investments across different timeframes and market conditions
Reduced emotional stress:
Trading during regular market hours can be emotionally taxing with rapid price fluctuations and the need for quick decisions. Overnight trading provides a more relaxed environment, allowing for a thorough market analysis and informed decision-making
Access to multiple markets:
Overnight trading allows access to markets that operate 24 hours a day, such as Forex and futures markets. This expands trading opportunities and the ability to benefit from different market trends and conditions
What are the best currency pairs to trade at night?
Determining the best currency pairs to trade at night depends on various factors, including individual risk tolerance and trading strategy. Since Forex trading operates 24 hours a day, there are opportunities for both long-term investment and short-term trading approaches. For traders seeking increased volatility during night sessions, focusing on Asian and Oceanian cross rates that exclude the USD can be advantageous. Currency pairs like AUD/NZD, AUD/JPY, or NZD/JPY may exhibit more significant price movements and provide trading opportunities during overnight sessions. It is important for traders to analyze market conditions, consider their risk preferences, and align their trading strategy accordingly to identify the best currency pairs for night trading.
Top 6 most traded currency pairs
Most traded currency pairs
EUR/USD (Euro/US Dollar)
The EUR/USD pair, known as the "fibre", is the most popular Forex pair due to its high trading volume and low spreads. It provides exposure to the economies of the United States and the Eurozone. Political movements and policies affecting the dollar and euro influence this pair. It is often favored by beginners due to the abundance of information available. The EUR/USD accounts for approximately 23% of daily trade volume.
Minimum spread: 0.7 points
USD/JPY (US Dollar/Japanese Yen)
The USD/JPY pair, also known as the "gopher", offers low spreads and relatively predictable price movements. The Bank of Japan's interventions in the currency market influence the yen's value, creating opportunities for traders. Trading USD/JPY allows investors to capitalize on fluctuations resulting from the economic relationship between the United States and Asian regions. It constitutes around 13.5% of daily trade volume.
Minimum spread: 0.7 points
GBP/USD (British Pound/US Dollar)
The GBP/USD pair, referred to as "cable", has gained popularity due to significant economic and political events in the UK, such as the financial crisis and Brexit. It is known for its volatility, with large price swings driven by various factors. Traders must manage the higher risks associated with this pair by implementing appropriate risk management strategies. GBP/USD represents approximately 6% of daily trade volume.
Minimum spread: 0.9 points
AUD/USD (Australian Dollar/US Dollar)
The AUD/USD pair, known as the "Aussie", accounts for 6% of daily Forex trades. It links the Australian dollar to the US dollar and is influenced by commodity prices, particularly metals and minerals. Changes in commodity values and interest rate differentials between the Reserve Bank of Australia and the US Federal Reserve impact this pair.
Average spread: 1.2 points
USD/CAD (US Dollar/Canadian Dollar)
USD/CAD represents the US dollar against the Canadian dollar and is considered a commodity pair. It exhibits a strong correlation with oil prices due to Canada's significant oil exports. Economic indicators and policies of both countries play a crucial role in determining the pair's movement. USD/CAD constitutes 5% of daily trade volumes.
Minimum spread: 0.8 points
USD/CHF (US Dollar/Swiss Franc)
The USD/CHF pair, known as the "Swissie", pairs the US dollar with the Swiss franc. It is the seventh most traded currency pair globally. The value of the Swiss franc is influenced by actions taken by the Swiss National Bank and economic data from Switzerland. The CHF is considered a safe-haven currency, attracting investors during times of market volatility. As demand for the franc increases, USD/CHF tends to decline. USD/CHF represents around 5% of daily global trades.
Minimum spread: 2.5 points
Which currency pair is most profitable in Forex?
The most profitable currency pairs in Forex can vary depending on the trader's approach and the prevailing market conditions. While there is no definitive answer, several currency pairs are commonly considered potentially profitable. These include popular pairs such as EUR/USD, USD/JPY, GBP/USD, USD/CAD, AUD/USD, and USD/CHF. Traders often gravitate towards these pairs due to their liquidity, volatility, and availability of market analysis.
In practice, EUR/USD, as the most traded currency pair, offers ample opportunities for profit due to its high liquidity and tight spreads. USD/JPY is known for its relatively predictable price movements and is favored by traders looking for stability. GBP/USD is characterized by its volatility, presenting both risks and rewards for traders. USD/CAD is influenced by commodity prices, particularly oil, and can provide profitable opportunities when analyzing these factors. AUD/USD, linked to commodity exports, and USD/CHF, affected by Swiss economic data and safe-haven demand, are also considered potentially profitable pairs.
Ultimately, the profitability of currency pairs depends on a trader's skill, knowledge, and ability to adapt to changing market conditions. It is essential to conduct thorough research, employ effective risk management strategies, and stay informed about global economic and political events that impact currency movements.
Where can I trade best Forex pairs
Oanda - Best for Forex trading in the US
When it comes to Forex trading in the US, Oanda stands out as a top choice with its extensive experience of over 26 years in the industry. It provides access to US clients and offers a user-friendly interface called fxTrade, which allows traders to engage in Forex trading with major currency pairs. Oanda goes beyond Forex trading and offers a wide range of services, including CFD trading across various asset classes like indices, metals, commodities, and bonds.
Oanda understands the diverse needs of traders and provides two account types: standard and Advanced Trader, catering to different levels of trading experience. The broker excels in transparency and trade execution, ensuring that clients receive fair and efficient trading conditions. The proprietary fxTrade platform offered by Oanda delivers a seamless desktop trading experience through web browsers, accompanied by robust research and analysis tools to support traders in making informed decisions.
In addition to its proprietary platform, Oanda also supports the widely popular MetaTrader 4 platform. This versatility allows traders to choose the trading platform that best aligns with their preferences and trading strategies. Overall, Oanda's reputation for transparency, superior trade execution, and a wide range of trading services makes it an excellent option for Forex trading in the US.
RoboForex - Best for international trading
When it comes to international trading, RoboForex stands out as a reliable and reputable brokerage firm with a strong presence since 2009. With its extensive reach across 169 countries and a vast client base of over 3.5 million users, RoboForex has earned a solid reputation as a top Forex broker based on positive client reviews. One of the key strengths of this broker lies in its expertise in software development, ensuring a seamless trading experience for its clients.
RoboForex offers a range of trading platforms, including the popular MetaTrader 4 and MetaTrader 5, catering to the diverse preferences of traders. This flexibility allows traders to choose the platform that best suits their trading style and requirements. Additionally, it provides various account types to accommodate different trader needs, along with promotional offers and rebate bonuses to enhance the overall trading experience.
To make trading more accessible and convenient, RoboForex also offers a mobile app that enables clients to trade on-the-go. This mobile app ensures that traders can stay connected to the markets and execute trades at any time and from anywhere. Moreover, for investors looking for simpler and shorter-term investment options, the broker offers the CopyFX investment platform. This platform allows users to replicate the trades of experienced traders, provided they meet the minimum deposit requirements specified by the chosen traders.
Summary
In summary, for those seeking overnight trading and increased volatility, the best currency pairs to trade at night are typically Asian and Oceanian cross rates that exclude USD, such as AUD/NZD, AUD/JPY, or NZD/JPY. These pairs offer opportunities for traders looking for more active market conditions during nighttime trading sessions. On the other hand, some of the most popular and potentially profitable currency pairs in Forex include EUR/USD, USD/JPY, GBP/USD, USD/CAD, AUD/USD, and USD/CHF. These pairs are widely traded, characterized by high liquidity and offer diverse trading opportunities. As a beginner trader, it is important to consider factors such as volatility, liquidity, and trading sessions when selecting currency pairs for your trading strategy.
FAQs
What Forex pair to trade at night?
For those looking to trade Forex at night, suitable currency pairs include Asian and Oceanian cross rates that do not include USD, such as AUD/NZD, AUD/JPY, or NZD/JPY.
Should you trade Forex at night?
Trading Forex at night can be beneficial for those who prefer increased volatility and are able to actively monitor the market during nighttime trading sessions. However, it is essential to consider personal trading preferences, market conditions, and individual trading strategies before deciding to trade at night.
Is trading at night better?
Whether trading at night is better depends on individual trading styles and preferences. Nighttime trading can offer increased volatility, which can present both opportunities and risks. It is important to assess market conditions, personal availability, and trading strategy to determine if trading at night aligns with your goals.
Which currency pair is best to trade?
The best currency pair to trade depends on various factors, including personal trading goals, risk tolerance, and market conditions. Some popular currency pairs for Forex trading include EUR/USD, USD/JPY, GBP/USD, USD/CAD, AUD/USD, and USD/CHF.
Glossary for novice traders
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Trading
Trading involves the act of buying and selling financial assets like stocks, currencies, or commodities with the intention of profiting from market price fluctuations. Traders employ various strategies, analysis techniques, and risk management practices to make informed decisions and optimize their chances of success in the financial markets.
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Broker
A broker is a legal entity or individual that performs as an intermediary when making trades in the financial markets. Private investors cannot trade without a broker, since only brokers can execute trades on the exchanges.
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Volatility
Volatility refers to the degree of variation or fluctuation in the price or value of a financial asset, such as stocks, bonds, or cryptocurrencies, over a period of time. Higher volatility indicates that an asset's price is experiencing more significant and rapid price swings, while lower volatility suggests relatively stable and gradual price movements.
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Forex Trading
Forex trading, short for foreign exchange trading, is the practice of buying and selling currencies in the global foreign exchange market with the aim of profiting from fluctuations in exchange rates. Traders speculate on whether one currency will rise or fall in value relative to another currency and make trading decisions accordingly.
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Investor
An investor is an individual, who invests money in an asset with the expectation that its value would appreciate in the future. The asset can be anything, including a bond, debenture, mutual fund, equity, gold, silver, exchange-traded funds (ETFs), and real-estate property.
Team that worked on the article
Chinmay Soni is a financial analyst with more than 5 years of experience in working with stocks, Forex, derivatives, and other assets. As a founder of a boutique research firm and an active researcher, he covers various industries and fields, providing insights backed by statistical data. He is also an educator in the field of finance and technology.
As an author for Traders Union, he contributes his deep analytical insights on various topics, taking into account various aspects.
Dr. BJ Johnson is a PhD in English Language and an editor with over 15 years of experience. He earned his degree in English Language in the U.S and the UK. In 2020, Dr. Johnson joined the Traders Union team. Since then, he has created over 100 exclusive articles and edited over 300 articles of other authors.
Mirjan Hipolito is a journalist and news editor at Traders Union. She is an expert crypto writer with five years of experience in the financial markets. Her specialties are daily market news, price predictions, and Initial Coin Offerings (ICO).