Forex trading hours in South Africa

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That The forex market has a unique structure that sets it apart from other assets. For example, stock markets have precise opening and closing times. The Johannesburg Stock Exchange (JSE), for example, is active Monday through Friday from 9 a.m. to 5 p.m. South African Standard Time (GMT +02: 00). So while there is a straight answer to the question, “When does the JSE open?”, The answer isn’t that straightforward when it comes to Forex. The forex market is open 24/7, which is ideal for traders who want to place trades before work or at the end of their day. But here the question arises: When does the forex market open? South Africa?

Overview of forex trading hours

The fact that the Forex market is traded 24/7 Monday through Friday means that not every country has an “official” opening and closing hours. For traders in all countries, the forex market closes on Friday at 5:00 p.m. EST and opens on Monday morning in Wellington, which is Sunday evening at 10:00 p.m. EST. The term “Forex Market Hours” or “Forex Trading Hours” simply refers to the times during this five-day period that traders can open / close positions and speculate on the price movements of currency pairs.

A great way to think about the Forex market is to divide the trading day into 3 sessions, which are the main money “centers”: Asia, Europe, North America. Each “center” has its own “personality” based on the goals and objectives of the market participants who work at different times.

For example, liquidity is worst during the Asian session (which includes Wellington, Sydney, Tokyo, Hong Kong, Singapore, and mainland China) and there is no desire to spark volatility due to the close links between economies.

Liquidity increases during the European morning when Frankfurt starts trading, but even more so when London opens. Liquidity is much higher in Europe due to the historical importance of various financial centers on the continent (Paris, Geneva, Frankfurt and to some extent Milan) and in the UK (London). Finally, with the Asian and European markets opening up, North America comes online and brings with it the largest pool of liquidity. This means that large funds can handle less slippage; the Canadian and Latin American markets also contribute to the liquidity pool.

EUR USD

The above chart highlights this dynamic well, with the Average True Range and rate of change of ATR applied to an hourly EUR / USD chart. Note the regular cycles: volatility starts to rise when London opens, peaks and starts to decline after the North American markets open, eventually bottoming out during the Asian session.

One way to hone your skills and adapt to the different money centers is to use an 8 hour rolling pivot. The rationale is simple: if price is trading above the pivot, sentiment for that session will be interpreted as “bullish”; If the price trades below the pivot, the mood is interpreted as “bearish”.

AUD / JPY

This does not mean that you should trade the breaks on the pivot. Instead, just use it as a “bias” or guide: use your technical signals on the 1-minute to 5-minute charts in line with that bias. A few examples are shown below.

AUD / JPY

AUD / JPY

Effects of Daylight Saving Time (DST)

While it is true that forex trading can be done 24 hours a day, 5 days a week, There is one detail that cannot be overlooked. Every day at rollover time (5:00 p.m. New York time) you will not be able to place trades for a short time (this depends on your broker).

The more important fact is that the spreads on various currency pairs can be much larger than usual just before the rollover time. In the graph below you can see Oanda’s historical spread and you will immediately notice that the spreads – even on EUR / USD – widen by up to 10 pips.

Historical EUR / USD spreads

This can make it impractical and risky to place trades near the rollover time, especially if you are using a tight stop loss. A safety precaution could be to act up to 30 minutes before the rollover or wait for up to 30 minutes after the rollover. There is hardly any volatility during these times anyway, so waiting 30 minutes shouldn’t make a significant difference.

Looking at the rollover hour, we need to digress a little and discuss daylight saving time. During winter in the northern hemisphere, when the US session closes at 5:00 p.m. EST, it is midnight (12:00 a.m.) in South Africa. If it is summer in the northern hemisphere and the US session ends at 5:00 p.m. EDT, it will be 11:00 p.m. in South Africa.

Because of this, in South Africa, the forex market opens and closes at either 11pm (between March and November) or midnight (between October and March). In general, you shouldn’t trade during these times (due to lower volatility and higher spreads). But if you are trading forex during these times, just keep these adjustments in mind.

Best time to day trading in South Africa

Knowing how the 24 hour cycle works You can now understand what the best time to trade forex in South Africa is: the slot between 10:00 and 17:00 SAST (South Africa Standard Time).

10:00 SAST is the time the London session begins and 5:00 pm is 2 hours before the US session begins. This is the main window where business news is published (always influential for intraday and day traders) and a high level of liquidity that allows for optimal trading conditions.

During these hours, intraday traders can take advantage of the increased volatility and increase their chances of meeting their profit targets. The graphic below shows forex trading sessions in South Africa time.

Money center activity time

43% of forex transactions are traded during the European session, making it the most important forex trading session of the day.

Of course, if you’re not day trading or scalping, liquidity and time zones are less of a concern. In swing or position trading (where you look for setups on the 4H or daily charts) you should be much more concerned with fundamentals, positioning and sentiment than trading at precise hours.

As a general rule, the longer your trading period, the more weight fundamentals should have in your trading plan and the less weight technical analysis and time zones should have.

Trading with the right time frames in South Africa

As we now understand, life in South Africa is not a disadvantage when it comes to forex trading. So the key is to align your preferred trading style with the right timeframe.

If you are a more aggressive and active person with less patience and a higher risk tolerance, you will likely be drawn to the shorter time frames. I would suggest sticking to the 5 or 15 minute frames for execution purposes and taking your bias off the 4H chart. Intraday trading will be more of a technical nature, but you also need to keep an eye on the macroeconomic calendar and avoid trading before any data is published. The best times for intraday trading in South Africa are 10:00 AM to 7:00 PM SAST.

If you are a calmer person with more patience and less risk tolerance, you may want to trade on the 4H chart or the daily chart. In this case, the time of day is much less relevant. Of more importance is the macro background and current sentiment of the instrument you are trading in. You just need to be aware of the daily rollover period and avoid trading at that time.

Final thoughts

South Africa is actually a decent place to trade Forex as the best trading conditions coincide with the SAST window from 10:00 AM to 7:00 PM. As such, It is actually easier to trade forex from South Africa than from the United States! Some traders in the US have to wake up at 3am to trade forex during the European session – not a comfortable time.

The best market liquidity, volatility and trading conditions are generally experienced during the London session and the early US session because the most important central banks, large speculators, global corporations, financial institutions, commodity markets and stock markets are active, all of which can meaningfully influence the currency markets.

The best currency market times in South Africa are quite comfortable, so motivated traders should be encouraged by this fact.

frequently asked Questions

When does the forex market in South Africa open and close?

Taking into account daylight saving time, the foreign exchange market in South Africa opens and closes at either 11:00 p.m. (between March and November) or 12:00 a.m. (between October and March).

What are the best times to trade forex in South Africa?

The best trading conditions (i.e., high liquidity and reasonable volatility) are usually between 10:00 AM SAST and 5:00 PM SAST.

Can you trade forex at night?

The forex market is open around the clock, so you can of course trade at night as well. The better question is do you want to trade at night? As discussed earlier in this article, volatility conditions and liquidity are not conducive to good trading conditions and so night trading is best avoided.

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