Best Time To Trade Forex In Mexico

Forex trading sessions in Mexico

Although the Forex Market is open 24 hours a day, 5 days a week (Monday to Friday), there are specific hours within the 24-hour cycle that traders should prioritize, depending on where they are in the world. If a trader is based in Mexico, they should focus on trading during the market sessions that align with Mexico’s time zones. As Mexico shares its timezones with the USA, we will use Eastern Standard Time when looking at the Forex trading sessions in Mexico.

Market opening hours vary depending on the country that the market is in. For example, the London currency market is the world’s biggest and is open from 3AM EST to 12PM EST. Due to the always-open nature of Forex trading, there are periods in the day where the open times of currency markets in different countries overlap each other – these are called market session overlaps. Here is a brief overview of the four markets, using Eastern Standard Time:

Sydney Session (Australian Session)

The official trading day starts in Sydney, Australia, when the Sydney market opens. It opens at 5PM and closes at 2AM EST. The most active currency pairs in the region are NZD/USD, AUD/USD, as well as other currency pairs featuring NZD and AUD.

Due to time zone differences, a trader in Mexico could begin trading in the Sydney market session on a Sunday afternoon, as it would already be Monday morning in Australia.

Tokyo Session (Asian Session)

The Tokyo Forex market session (sometimes called the Asian session) opens two hours after Sydney’s and runs from 7PM to 4AM EST. The Tokyo market takes in the bulk of trading in Asia, and the pairs seeing the most amount of action are USD/JPY, GBP/USD and GBP/JPY.

This market session’s time zone would allow a trader in Mexico to start trading in Monday’s session on a Sunday evening. However, as Tokyo’s session is open when it’s late night in Mexico, it’s not the most ideal session for traders there.

London Session (European Session)

The London Forex market session, or European session, dominates the currency markets, as London is where most Forex trends often originate. Its market session is open from 3AM to 12PM EST (noon). The most active trading pairs are EUR/USD, GBP/USD, EUR/GBP, and USD/CHF. The later hours of the London market session are ideal for traders in Mexico, particularly where it overlaps with the New York session.

New York Session (North American Session)

The New York market session, Or North American sessions, is the second largest Forex trading platform in the world, and runs from 8AM to 5PM EST. As 90% of all trades involve USD, and this Forex market opens in tandem with the New York stock exchange, the New York session is extremely active. The best currency pairs to trade during this session are ones including the USD, such as EUR/USD, USD/JPY, GBP/USD.

As this session is often referred to as the North American session, and both the USA and Mexico are in North America, it is the most suitable session for traders in Mexico.

Forex Trading Sessions

Time Zones in Mexico

Time zones affect Forex traders because the Forex market operates 24 hours a day, five days a week, and trading activity is closely tied to different global financial centers. As there are multiple sessions where different markets are open, traders operate within different sessions that are more closely aligned with their own country’s timezones. For example, someone based in Paris might opt to trade during the London (European) session as its opening hours of 8AM to 5PM would be most active, are daytime hours, and have two overlaps with the Tokyo and New York session.

Mexico is a geographically large country that covers three time zones; Mexican Pacific Time, Mexican MountainTime and Mexican Central Time. These Mexican time zones align topographically with the USA’s Pacific, Mountain and Central Standard time zones.

Here are the time zones in Mexico, spanning from East to West:

Mexican Central Standard Time (MCT)

Mexico’s MCT time zone covers most of the nation’s territory, from the center to the East. MCT is 6 hours behind GMT, and 1 hour behind EST. Most traders in Mexico operate within this time zone.

Mexican Mountain Standard Time (MMT)

The MMT time zone covers the central part of Mexico’s landmass, and lines up with the USA’s own Mountain Standard Time Zone. Mexican Mountain Time is 7 hours behind GMT, and 2 hours behind EST.

Mexican Pacific Standard Time (MPT)

This time zone covers the most Western part of Mexico, which is the country’s Baja California region. It aligns with the USA’s Pacific time zone in California and is 8 hours behind GMT, or 3 hours behind EST.

What is the best time to trade Forex in Mexico?

The best time to trade Forex in Mexico depends on a few factors, from your trading strategy to the currency pairs you’re interested in. Things to consider include:

Local Stock Exchange: The Mexican Stock Exchange is open from 7:30AM to 2:00PM MCT, and stock trading strongly affects Forex trading. A trader in Mexico might want to consider these hours.

Currency Pairs: The exotic trading pair USD/MXN, which is U.S. Dollars and Mexican Pesos, is one of the most heavily traded emerging pairs, due to close trading ties between the two nations. If trading this pair, then it is beneficial to trade during Mexico’s Stock Exchange hours. If you are trading major or minor currency pairs, then you should trade when the markets of their respective nations are most active.

Session Overlap: Session overlap hours provide traders with the highest levels of liquidity and volatility. In the Mexican time zones, the afternoon of the London session overlaps with the morning of the New York session, from 8AM to midday EST. This would be 7AM to 11AM in Mexican Pacific Time.

Waking hours: As a trader, you don’t want to be trading all night, which can lead to exhaustion and poor decision-making. Fortunately, Mexico’s time zones align closely with those of the USA. Mexico Forex market hours are almost identical to the New York Forex session hours, so traders in Mexico could be active from 7AM to 4PM (MPT) and take advantage of the highly active North American session hours.

Best time to trade Forex - TU Research

Traders Union’s research department has conducted studies to determine which are the best currency pairs, and when is the best time to trade Forex. TU researchers found that according to users, high liquidity was the biggest factor impacting the choice of currency pairs. Availability of news and analytical materials was also said to be a big factor.

Factors impacting the choice of currency pairs

The majority of market news and events that will affect trading, will happen during the North American session. When trading in Mexico, the hours of the day will align with timezones in the USA. For this reason, Forex traders in Mexico would be best served by trading during the North American session from 8AM to 5PM EST.

Best time for Forex day trading in Mexico

According to TU’s research, trading hours with the highest liquidity are optimal for day traders to yield positive results. Liquidity plays a vital role in influencing traders' results in the Forex market and denotes the ease with which a currency pair can be bought or sold without causing significant price fluctuations. High liquidity means there are more buyers and sellers in the market, resulting in faster execution of trades at desired prices. Liquid markets also tend to have more stable and orderly price movements.

When accounting for the research conducted by Traders Union, and optimizing day trading times for the best liquidity, there are key time frames for day trading in Mexico, according to the Mexican Central Time Zone:

London-New York Overlap (12PM to 4PM MCT)

This period sees the simultaneous activity of the London and New York sessions. It's often considered the best time for day trading because of increased trading volume and liquidity.

Early New York Session (8AM to 12PM MCT)

The beginning of the New York session also offers good trading opportunities. This time frame is particularly useful for trading currency pairs affected by US economic data releases, which usually occur during this period.

European Session (2AM to 8AM MCT)

The European session is an option for early-morning day trading in Mexico. It's most active during the overlap with the Asian session between 8AM to 9AM EST (7AM to 8AM MCT).

Best Forex pairs to trade in Mexico trading sessions

The best Forex pairs to trade in Mexico are completely dependent on the hours that a trader decides to trade. Considering the best Mexican trading hours closely align with the New York session’s opening hours, we can use these hours as a guide for selecting the best currency pairs for Mexico.

While trading during the London-New York session overlaps, currency pairs involving the US dollar (e.g., EUR/USD, GBP/USD) are particularly active. During the early hours of the New York session, currency pairs featuring USD would see high trading volume. During the European session, traders would see most action on currency pairs like EUR/USD, EUR/JPY, and GBP/USD.

Time to pause Forex trading in Mexico

Due to the time differences in Mexico, there are hours when trading should be put on hold, relative to the hours of the international trading day. The trading day typically ends at 5PM EST, which would be 4PM MCT. To avoid incurring interest or overnight fees, traders should be aware of the rollover from the previous trading day to the next.

Other times to avoid trading in Mexico are the times with lower liquidity, such as those with no market session overlaps, and the opening hours of slightly less active markets such as Sydney and Tokyo. Due to these factors, the best time to pause trading in Mexico is just before 4PM (MCT), while deprioritizing the hours from 4PM to 2AM (MCT).