Best Time to Trade Forex in South Africa

Classical Forex Trading Sessions

Before looking at when the best times are to trade forex in South Africa, it’s important to first understand when the global forex sessions are around the world. There are basically four main trading sessions around the world that account for over 65% of the volume of the global forex market and most of the overall liquidity.

Global FX Sessions

During these four sessions, there are also several overlaps during which the volume and liquidity increase and, as such, have an impact on trading. The first is between 11 pm GMT (6 pm EST) and 7 am GMT (1 am EST) when there’s an overlap between Sydney and Tokyo. During this overlap, the maximum volume is traded with the currency pairs of these regions.

Between 8 am GMT (3 am EST) and 9 am GMT (4 am EST) there’s another overlap when the sessions in Tokyo and London overlap. During this overlap, the most actively traded currency pairs are the pairs of Europe and Japan.

Finally, there’s an overlap between the sessions in London and New York between 1 pm GMT (8 am EST) and 5 pm GMT (12 pm EST) during which the most actively traded currency pairs are EUR/USD and GBP/USD.

During these overlaps, trading volumes increase significantly, in other words, there’s substantial liquidity in the market.

What is the Best Time to Trade Forex in South Africa?

Now that we’ve looked at the main global forex sessions around the world and the relevant time zones in South Africa, it’s time to consider when the best time for trading forex in South Africa is.

Best time to Trade Forex - TU Research

The first step to determine the best time to trade forex in South Africa is to determine when the best times are to trade overall. Traders always believed that the times with the most liquidity and volatility in the market were the best times to trade forex. Generally, these times fall on Thursdays and Fridays and, as a result, many traders believed that these days were the best days to trade forex.

However, at Traders Union, our experts have conducted research and can now disprove this myth. During this research, our experts interviewed 2,080 traders of whom 81% were men and 19% were women.

In the cohort, 4% of the traders have been trading forex for over 10 years, 28% have been trading for more than 5 years, 38% have been trading between 3 and 5 years, 21% have been trading between 1 and 3 years, and 9% have been trading for less than a year.

Respondents trading experience

In respect of returns, 3% of the cohort showed an average monthly return of up to 15%, 17% showed monthly returns of up to 10%, 29% showed monthly returns of up to 5%, 32% showed monthly returns of up to 3%, and 19% showed monthly returns of up to 1%. To achieve these returns, 44% of the traders used intraday strategies while 44% used long-term strategies.

The average mountly return rate of successful traders, %

Now, based on the above research and the responses from the traders, what is the best time to trade forex? Interestingly, an overwhelming majority of traders stated that their most profitable day of the week to trade forex was Wednesday.

days of the week with the highest number of profitable trades

In respect of the best time to trade forex, the majority (38%) of the traders stated that the best time to trade was between 6 am GMT (1 am EST) and 12 pm GMT (7 am EST). In turn, 31% of the traders stated that the best time for them to trade was between 6 pm GMT (1 pm EST) and 12 am GST (7 pm EST).

best time of day to trade Forex

Now, if we combine the above results, it appears that Wednesdays are the best days to trade between 6 am GMT (1 am EST) and 12 pm GMT (7 am EST). It also appears that Thursdays are the second-best day to trade at the same times mentioned.

overlapping picture 6 and picture 7

In addition, other results from the research show that, for long-term strategies, Wednesdays and Mondays are the most successful days for trading. Moreover, for short-term strategies, Wednesdays and Thursdays are best.

Best Time for Forex Day Trading in South Africa

Now, based on the results of the research, we can establish what the best times are to trade forex in South Africa. Here, the best times to trade forex are on Wednesdays and Thursdays. When it comes to specific times, the best times to trade are 8 am South African time to 2 pm South African time and between 8 pm South African time and 2 am South African time.

Keep in mind, however, that, apart from taking note of these times when it could be more profitable to trade forex in South Africa, it’s also important to understand the impact that liquidity, volatility, other market conditions and indicators, and news like statistical data releases have on trading.

For example, higher liquidity generally means lower spreads and a reduced possibility for slippage which could lead to higher profits. Once you understand these aspects and the interplay between them, you’ll be able to trade profitably no matter what time of the day or day of the week it is.

Best Forex Pairs to Trade in South African Trading Sessions

Considering the best times to trade forex in South Africa as mentioned above, it appears that these times fall mostly within the New York session, the London Session, and the overlap between them. At the fringes of these time periods, there are also an hour or two of the Tokyo and Sydney sessions.

It, therefore, seems that the best forex pairs to trade will be those that are based on the US dollar or European currencies. However, as mentioned earlier, when you understand the aspects mentioned above, you’ll be able to execute profitable trades with any currency pair.

How Can Daylight Savings Time (DST) Impact Your Trading?

As mentioned earlier, South Africa doesn’t use daylight savings time. This means that, during its summer months, the best times to trade and rollover times will shift forward by one hour. As a result, you should know when this will happen so that you can prevent any unnecessary losses.