What are the Best Times to Trade Forex in Singapore?

The best time to trade forex in Singapore is between 8 and 11 PM in the evening, as the London and New York markets overlap, creating the best trading conditions. An alternative period is between 3 PM and 4 PM local time, as the closing hour of the Tokyo exchange overlaps with the London open.

Why Trade Forex?

Forex trading is one of the professions that provide for a lot of independence, but are not without constraints. Unlike traditional markets that operate during fixed hours, the forex market is open 24 hours a day, five days a week, allowing individuals to trade at any time that suits their schedule. This accessibility and flexibility appeal to those seeking to balance trading with other commitments, making forex an attractive option for full-time and part-time traders.

Although this global market trades 24 hours, 5 days per week, market volume can oscillate widely, revolving around working hours at key financial centers such as London and New York City.

Volume in forex trading is a crucial indicator that reflects the number of lots traded in a currency pair within a certain timeframe. It represents the total amount of currency bought and sold, providing insights into market activity and liquidity. Higher volume often corresponds to greater market liquidity, meaning traders can execute positions more quickly and with narrower spreads.

Best Times to Trade Forex in Singapore based on Trading Style

Short-term traders: Singapore traders should focus on periods when the forex market is most active, including the overlap between the London and New York sessions (8 PM – 11 PM SGT). An alternative choice is the overlap between the closing hour of the Tokyo market and the opening hour of the London market, between 3 PM and 4 PM SGT.

Volume (liquidity) drives the market, creating better trading conditions with tighter spreads and directly reducing an often overlooked trading aspect (particularly for short-term traders): the cost of entry. Liquidity also drives volatility, another important factor for short-term traders who look to profit from intra-day moves.

Swing traders: Swing traders based in Singapore have the benefit of taking positions in the Asian session, which begins with the Australian market opening at 5 AM SGT. This session is less volatile and more range-bound but still provides a quality environment for swing trading positions.

Positional traders: For traders with a long-term horizon, location and intra-day volatility don't play a significant factor. However, they should pay attention to volume if they're looking to minimize trading costs and avoid excessive slippage.

Navigating Forex News From Singapore

Economic news releases during the Asian session are important as they can influence market movements significantly. Key economic indicators from Japan, Australia, and China are often released during this time, impacting major currency pairs like USD/SGD, USD/JPY, or AUD/USD. For Singapore-based traders, paying attention to these releases is essential for executing their trading plans.

Some of the most anticipated global economic news releases are scheduled later in the trading day. For instance, the Federal Open Market Committee (FOMC) meetings and the U.S. Non-Farm Payrolls (NFP) report are typically released in the evening SGT. The FOMC announcements usually occur around 2:00 AM SGT, while the NFP report is released at 8:30 PM SGT. These events can cause substantial volatility across forex markets, and traders must be aware of them – especially if they want to enter or exit a position.

Facts To Keep In Mind When Trading Forex From Singapore

The following details should be observed:

• Trading Style and Session Selection: Your trading style significantly influences the best times to trade. For short-term traders, the overlap between the London and New York sessions (8 PM – 11 AM SGT) provides high volume and liquidity, creating better trading conditions. Swing traders benefit from the Asian session's moderate volatility, starting with the Sydney and Tokyo overlap, around 6 AM SGT, providing a conducive environment for taking swing trading positions.
• Personal Schedule and Flexibility: Forex trading offers unparalleled flexibility, allowing traders to balance their trading activities with other commitments. The 24-hour nature of the forex market means that traders in Singapore can choose to trade at any time that fits their personal schedule, whether during the day or night. This flexibility makes forex trading an attractive option for both full-time and part-time traders.
• Impact of Volume on Trading: Volume is vital for understanding market trends; for example, a strong trend typically requires increasing volume to sustain momentum. Conversely, if a trend continues on declining volume, it may indicate a potential reversal. By analyzing volume alongside price action, traders can make more informed decisions about entry and exit points, ultimately enhancing their trading strategies. Volume is particularly important for short-term traders who need to minimize trading costs and avoid slippage.
• Economic News Releases: Economic news releases can significantly impact forex market movements. For Singapore-based traders, key economic indicators from Japan, Australia, and China during the Asian session are crucial. Additionally, major global economic news, such as the FOMC announcements and U.S. Non-Farm Payrolls report, occur in the evening SGT (around 2:00 AM and 8:30 PM, respectively). Awareness of these releases is vital for making informed trading decisions and managing potential market volatility.

 

Frequently Asked Questions

What is the best time to trade forex in Singapore?

The best time to trade on foreign exchange is in the evening, starting at 9 PM SGT, when the European and American markets overlap, creating the best trading conditions.

Is forex trading allowed in Singapore?

Forex trading is legal in Singapore and available through authorized and regulated brokers. Traders should pay attention to regulation, as the Monetary Authority of Singapore (MAS) acts as the country’s financial regulatory body, with strict rules for protecting consumer rights in financial markets.