Forex Trading Sessions in Pakistan
Forex operates 24/7, providing traders with the flexibility to enter and exit the market at any time. However, there are specific Forex trading sessions that are more suitable for traders in Pakistan. In this article, we'll delve into these optimal trading times for Pakistan, exploring Forex sessions and their impact on the market.
Sidney (Pacific Region): Active from 22.00-7.00 GMT, focusing on Pacific economies like Australia and New Zealand
Tokyo (Asian Region): Runs 23.00-9.00 GMT, spotlighting the Japanese Yen and related pairs
London (European Session): From 8.00-17.00 GMT, with the Euro and British Pound as key players
New York (American Session): Active 13:00-22.00 GMT, characterized by high volatility and US Dollar-centric trades
Classical Forex trading sessions
The global Forex market operates 24/7, but not all hours are equally active or suitable for traders. The market's activity is divided into four primary sessions, each associated with a major financial hub: Sidney, Tokyo, London, and New York. These sessions determine the best times to trade specific currency pairs based on their activity and liquidity.
Sidney (Pacific Region). Spanning from 22.00 GMT to 7.00 GMT, the Sidney session is the first to open after the weekend, setting the tone for the week. It's during these hours that the Pacific region, including Australia and New Zealand, becomes the epicenter of Forex trading. The most actively traded pairs in this session are those linked to the Pacific economies. NZD/USD, representing the New Zealand Dollar against the US Dollar, and AUD/USD, representing the Australian Dollar against the US Dollar, are the stars of this session. Other pairs involving the New Zealand and Australian dollars also see heightened activity
Tokyo (Asian Region). Following Sidney, the Tokyo session runs from 23.00 GMT to 9.00 GMT. As Asia wakes up, the focus shifts to the Japanese Yen (JPY). Pairs like USD/JPY, EUR/JPY, and GBP/JPY become the primary attractions. The Yen, being a major global currency, sees significant fluctuations during this period, making it a favorite among traders looking for volatility
London (European session). The London session, active between 8.00 GMT and 17.00 GMT, is often considered the heart of the Forex trading day. London, being a major financial hub, witnesses massive trading volumes. Major European currencies, especially the Euro and the British Pound, come into play. Pairs such as EUR/USD, GBP/USD, EUR/GBP, and USD/CHF are the most traded, with traders worldwide keenly watching European economic indicators and news events
New York (American session). Starting at 13:00 GMT and wrapping up at 22.00 GMT, the New York session overlaps with the latter part of the London session. This overlap often results in high volatility and trading volumes. Currency pairs containing the US Dollar, like EUR/USD, USD/JPY, and GBP/USD, are the focal points. Given the US's economic significance, major market movements often originate from this session
Time zones in Pakistan
Pakistan functions on Pakistan Standard Time (PKT), set at UTC+05:00, placing it five hours ahead of Coordinated Universal Time (UTC). In Forex trading, understanding the nuances of time zones is pivotal, especially when considering the phenomenon of market overlaps. These overlaps occur when two major trading sessions with global financial hubs operate concurrently. The simultaneous activity in these sessions amplifies trading volumes, leading to heightened volatility, which can be both an opportunity and a challenge for traders.
Given Pakistan's position in the GMT+5 time zone, its Forex market operates in sync with the global standard trading hours. While local businesses might close, the Forex market remains bustling, operating 24 hours daily from Monday to Friday. This continuous operation gives Pakistani traders a wide window to engage with global markets.
However, not all hours are equally profitable. Experienced traders in Pakistan have pinpointed a specific window that tends to be more lucrative than others. The 9:30 a.m. to 10:30 a.m. ET time frame is often highlighted as a golden hour for day trading. During this slot, market movements are pronounced, allowing traders to capitalize on significant price shifts quickly.
What is the best time to trade Forex in Pakistan?
The Forex market offers round-the-clock opportunities, but not all trading hours are equally lucrative. For Pakistani traders, the key to success often lies in aligning with the global market's rhythms. One of the most opportune windows is the overlap of the US and London markets, which occurs between 8 a.m. and 12 p.m. EST. This four-hour stretch is a hotspot of activity, characterized by heightened trading volumes and significant market movements. For Pakistani investors, this overlap translates to prime investment opportunities, as major currency pairs exhibit increased volatility and liquidity.
However, the global consensus is one of many guides for Pakistani traders. Seasoned professionals, understanding local and international dynamics, have identified three optimal trading slots tailored for the Pakistani market. These are:
Early morning to noon (5 am – 12 pm). This period captures the tail end of the US session and the beginning of the European session, offering a blend of both markets
Noon to evening (12 pm – 7 pm). Primarily covering the European session, this slot sees significant activity in pairs involving the Euro and GBP
Night to early morning (7 pm – 5 am). Encompassing the Asian and Pacific sessions, this period is ideal for those trading pairs involving JPY, AUD, and NZD
Best Forex pairs to trade in Pakistan trading sessions
Certain currency pairs have emerged as favorites among traders in Pakistan. These pairs are not only influenced by global economic events but also resonate with local investors' trading strategies and preferences. Here's a closer look at the most traded and active Forex pairs now in Pakistan:
EUR/USD. Representing the Euro against the US Dollar, this pair is one of the most traded globally. Its popularity stems from the economic significance of the Eurozone and the US, making it highly liquid and subject to numerous trading strategies
USD/JPY. This pair signifies the US Dollar's relationship with the Japanese Yen. Given Japan's stature as a major global economy and its significant trade relations, fluctuations in this pair are closely watched by traders, especially those interested in the Asian market dynamics
GBP/USD. Reflecting the British Pound Sterling against the US Dollar, this pair is influenced by economic events in the UK and the US. Brexit-related news, in particular, has added an extra layer of volatility to this pair in recent years
USD/AUD. This denotes the US Dollar's value against the Australian Dollar. With Australia's economy heavily reliant on commodity exports, this pair is often influenced by global commodity prices, especially metals and minerals
USD/CHF. Representing the US Dollar against the Swiss Franc, this pair is a barometer of the US's economic health juxtaposed with Switzerland's reputation as a global banking hub. The Swiss Franc is often seen as a "safe-haven" currency, making this pair particularly interesting during global economic uncertainties
For Pakistani traders, understanding the dynamics of these pairs, backed by thorough research and analysis, can pave the way for informed trading decisions and potential profitability. You must choose the best Forex brokers that allow you to trade these Forex pairs in Pakistan.
Time to pause Forex trading in Pakistan
The worst time to trade Forex in Pakistan, or in any market, is generally when the market is experiencing low liquidity and reduced trading activity. You can pause your Forex trading for this period. During these times, price movements can be erratic, spreads (the difference between bid and ask prices) can widen significantly, and it might be difficult to execute trades at desired prices. Here are some periods when trading conditions might be less favorable:
Weekend Gaps: The Forex market is closed during the weekends (from Friday evening to Sunday evening GMT), and when it opens on Sunday, there can sometimes be significant price gaps due to news events and developments that occurred while the market was closed. This can lead to unpredictable price movements and increased risk
Asian Session Midpoint: The Asian session (Tokyo session) typically experiences lower volatility compared to the London and New York sessions. The midpoint of the Asian session (around 2:00 AM to 4:00 AM PKT) might have even lower activity and less predictable price movements
End of Trading Day: The last few hours of the New York session (around 9:00 PM to 12:00 AM PKT) might see reduced liquidity as traders in the U.S. wind down their activities and prepare to close their positions for the day
Major Holidays: During major holidays in key financial centers (such as Christmas and New Year), trading activity can be significantly diminished, leading to lower liquidity and potentially wider spreads
Economic Data Releases: While economic data releases can create opportunities for trading, they can also lead to increased volatility and unpredictable price movements. Many traders avoid trading during major economic announcements unless they have a specific strategy designed for such events
Remember that these "worst" times for trading can also vary based on your trading strategy.
Best Forex brokers in Pakistan
FAQs
What time of day is best to trade foreign exchange in Pakistan?
There are three best times to trade Forex in Pakistan, and that is 5 am – 12 pm (Noon), 12 pm – 7 pm(Evening), and 7 pm – 5 am(Night).
What month is best for trading in Pakistan?
Due to increased volatility and trading activity, January, February, March, April, September, and October are ideal.
What are the best hours to trade in Pakistan?
The best Forex hours in Pakistan are 5 am – 12 pm, 12 pm – 7 pm, and 7 pm – 5 am.
Is it good to trade forex at night in Pakistan?
Yes, trading Forex from 7 p.m. to 5 a.m. in Pakistan is advantageous.
Team that worked on the article
Alamin Morshed is a contributor at Traders Union. He specializes in writing articles for businesses who want to improve their Google search rankings to compete with their competition.
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).