When is the best time to Trade Forex in South Africa?

Understanding the best time to trade forex in South Africa depends on a number of factors. In this article, we’ll cover the different Forex markets sessions and explain how to decide on the best time to trade forex.

Trading the international foreign exchange markets online in South Africa is accessible Monday to Friday 24 hours per day, 5 days a week. The global Forex markets are open and available to be traded at 23:00 in South Africa on a Sunday evening and closes at 23:00 on a Friday night.

Positions can be held overnight, for days on end, depending on the preference and strategy of the trader. Many South African online traders who start their trading journey do not completely understand when the best time to trade would be, and more importantly, why… 

Before we dive deeper it is important to grasp what to look for when deciding on your trading strategy and preference.

There are 3 key factors to consider when and how to trade Forex

  • Liquidity
    • ease of which positions can be opened and closed
  • Volatility 
    • price movement creating opportunities for traders
  • Trading Volume 
    • How many times a currency pair is bought or sold in a period

When Forex markets are most active trading conditions can be favorable as spreads are low and market movements increase.  This can be seen when the London session opens, as there is often big trading volume and therefore good volatility. The same can be said for the opening bell of the U.S session which brings huge liquidity to the market.

Understanding the best times to Trade Forex in South Africa

Forex Market Hours in South Africa

World Markets Trading Hours SAST
Sydney, Australia 24:00 – 08:00
Tokyo, Japan 2:00 – 04:30 / 05:30 – 08:00
London, England 10:00 – 19:00
New York, USA 15:30 – 22:00

*All times are South African Standard Time

This article focuses on the top 4 major market sessions affecting Forex trading

How to decide which markets to trade

The first aspect of trading international Forex markets is to identify which markets to trade (EUR, USD, GBP, CHF). Once you have made the decision of which session and currency pair to trade, you can determine what time the market will be actively traded within the country.

It is then important for the discerning South African trader to then take note of the time zone differences and plan trade strategies accordingly.

If you are trading with the goal of closing out your positions after a few days, weeks, or months, then these open / closing times should not affect you greatly. Traders who should take notice are scalpers and day traders. 

As traders we want volatility in the markets and, just because the markets are always active, does not mean that they are volatile.

Volatility happens when the exchange opens, and investors are affecting market movements with big orders being processed. Therefore, it is important to note when specific markets open relative to South African time.

The risk of holding a position when different market sessions overlap is big market movements that can negatively affect your open trade. 

For example, if you are trading the AUD/USD from 9:00 SAST, you may find the market moves slowly compared to others, because of the fact that neither of these countries (Australia / United Stated) exchanges are open; but when the U.S session does open, your position gets whipsawed in different directions due to liquidity entering the markets. 

This article is being written solely for the purpose of providing our local South Africans with insight and perspective.

When trading in South Africa we need to determine the markets, which will provide the most consistent volatility throughout the hours we are actively monitoring our trades. 

Therefore, trading markets such as the GBP, ZAR, and EUR would be recommended due to the small gap in the time zones, as the EUR / GBP markets open at 10:00 am.

If you are looking to trade USD pairs, for example, you would look to start your trading day around 15:30 when the U.S session opens. 

Trading in the relevant market sessions allows you to decrease your risk through anticipating volatility and holding onto your positions with a trading plan in mind to know when to start closing out. 

As a South African trader, the best time to trade is when major market sessions overlap.

This is generally between 10:00 and 16:00. During these hours South Africans can catch the last two trading hours of the Tokyo session, which overlaps with the opening of the London session, and a few hours later this session overlaps with the opening of the U.S markets. 

The London and the U.S sessions are generally the most active trading hours as all market participants affect the currency market in some way. These sessions are prone to important economic news and data being released that potentially have a great impact on exchange rates. 

By understanding market sessions you can identify suitable forex strategies based on market activity in those sessions. Volatile market sessions and major currency pairs are ideal for applying a forex scalping strategy if your risk appetite can handle it.