Hi Jeffguroo,

Thanks for the question. As far as when the best time is to trade currencies it really depends on the currency you are trading and what your objectives are. Kathy Lien in her book Day Trading The Currency Market has devoted a full chapter to the characteristic's of the different trading sessions which is a great read on the topic. Below are my thoughts:

London is the center of the FX world so the most trading and volatility goes on during the London session which runs from about 2am to 12pm NY Time. Many times the most volatile part of the 24 hour FX trading day is when both London and the US are trading which runs from about 8am to 12pm NY time. In addition to have both of these major money centers open and trading, many major market moving US news releases such as Non Farm Payrolls come out during this time so you can get a lot of action during these 4 hours.

As stated above the most active part of the US Trading session is from 8am to 12pm NY time. After 12pm unless there is a major news release such as a fed rate decision then trading is normally pretty quiet until the Asian session picks up later in the afternoon. While this is not a great time for trading for people that are looking for action, it can be a nice time to jump in and out of a few trades for the new trader looking to test the water.

With the exception of Yen denominated pairs such as USD/JPY and GBP/JPY, The least activity on average goes on during the Asian trading session which runs from about 7pm to 4am NY time. Because of the lack of volatility this can be a good time for newer traders to get their feet wet as the chance of a large adverse move is normally smaller here.

In terms of times of the week Sunday afternoon before the London session opens and friday's unless there is a news release in the US tend to be pretty dead.

In terms of times of the year watch out for Summer time and Holiday's where the bank trading desks around the world are thinly staffed as although most of the time its dead there can be large moves as traders try to take advantage of the lack of liquidity in the market to run stops.

Hope that helps. Would love to hear others thoughts on this so please post them below.

Best Regards,
David