Forex trading sessions in Nigeria are broken up according to the time zones of the major sessions. They begin and end at different times, with some overlap in between. Every trader in Nigeria should be familiar with the major sessions and which currencies to trade for the best profit at the best time.
Below we dive into the four major forex trading sessions, their time zones, and the best times for traders in Nigeria to trade. This guide will help you improve your trading strategy according to the time you complete transactions.
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Forex Trading Sessions in Nigeria
The forex market is open 24 hours, from Monday to Friday. That means you can buy, sell, and trade financial instruments whenever you want during the week. But there is one catch – the forex markets don’t open and close at the same time.
If you attempted to trade at all hours, you wouldn’t have time to eat, sleep, or spend time with loved ones until the weekend when the market is closed. That’s why traders primarily focus on one or two markets that best align with their schedule and time zone.
Some traders refer to the trading sessions by continent, while others prefer to use the city names. Below we use the city names to list the different forex trading sessions, but we also include the continent trading session name so you can better differentiate between the different locations.
Before you decide which Nigerian forex trading session is the best for you, take a look at the different trading sessions and which trading pairs are the most popular during these time windows.
The Sydney session, also known as the Pacific session, begins in New Zealand on Monday. Although Sydney is located in Australia, New Zealand is one of the major financial districts. Due to the different time zones, it opens when it’s still Sunday in most of the world.
The Sydney session is open from 4 AM to 1 PM or 5 AM to 2 PM in local Nigerian time. During this trading session, the most popular trading pairs are AUD/USD and NZD/USD. Trading the pair AUD/JPY is also popular during the overlap of the Tokyo and Sydney session.
The Tokyo session, or Asian session, is open from 12 AM to 9 AM. In Nigerian time, the Asian session is open from 1 AM to 10 AM. During this time, the most popular currency pairs are the following:
The Tokyo session is also known for lower liquidity and volatility. That means markets outside of Asia are less likely to make big moves. This affects common pairs during night trading sessions in Nigeria, such as EUR/USD and GBP/USD.
The London session, or European session, is open from 8 AM to 5 PM According to the time in Nigeria, this session is open from 9 AM to 6 PM. The currency pairs to keep an eye on during the London trading session are GBP/USD, GBP/USD, and EUR/USD.
Traders see an increase in volatility when shifting from the Tokyo session to the London session. Experienced traders can use the heightened volatility to their advantage. The prices from London also lead to an increase in prices or the “average hourly move” on major currency pairs.
New York Session
The New York session, also referred to as the North American session, is open from 2 PM to 11 PM In Nigeria, the New York session is open from 3 PM to 12 PM. The most traded currency pairs during this session are:
Pay attention to the points when two trading sessions overlap. The periods when two markets are open simultaneously are the busiest times of the day. During this time, trades are made at the highest volume.
Daylight savings time (DST) will also affect the hours of the trading sessions. Japan keeps it simple and doesn’t follow daylight savings time, but New Zealand, England, and the United States experience a time change every spring and fall.
What’s more, New Zealand is on the opposite pole from the United States. When it’s spring in New Zealand, it’s fall in the United States and vice versa. This means the time change moves in the opposite direction as well. The DST change also takes place on different days.
These seasonal changes will affect how forex trading sessions are used in Nigeria. Mark these dates on your calendar so you can easily adjust your trading schedule during the switch.
Timezones to Know
Participating in any forex trading session in Nigeria requires knowing when each trading session starts and ends in Nigeria. Nigeria is located in West Africa, which means the country follows West Africa Time (WAT).
West Africa Standard Time is one hour ahead of Greenwich Mean Time (GMT) and one hour ahead of Coordinated Universal Time (UTC). This timezone appears as GMT +1 or UTC +1. West Africa Time does not have an associated daylight savings time, which is important when the seasons change in the countries that do.
For starters, Nigeria is 10 hours behind New Zealand. Sydney (also considered Wellington when it comes to the time zone), follows Australian Eastern Time (AET). This timezone is UTC/GMT +10. During daylight savings time, Australian Eastern Time (AET) becomes Australian Eastern Daylight Time (AEDT) and is temporarily UTC/GMT +11.
Nigeria is eight hours behind Tokyo. Tokyo follows Japan Standard Time (JST), which is UTC/GMT +9. Japan doesn’t follow daylight savings time, so the opening and closing of the Tokyo session remains the same all year long.
When it comes to London and Nigeria, there is only a one-hour difference led by England. London follows Greenwich Mean Time (GMT). England also follows daylight savings time. During daylight savings time, Greenwich Mean Time becomes British Summer Time (BST) GMT +1.
Last but not least, the time difference between Nigeria and New York is five hours. Nigeria is five hours ahead of New York, which follows Eastern Standard Time (EST) or UTC/GMT -5. New York and the rest of the Eastern coast of the United States follow daylight savings time. During daylight savings time, Eastern Standard Time (EST) becomes Eastern Daylight Time (EDT) and adds an hour.
Remembering all of this information may seem like a lot at first. But over time, you will get used to the start and end times of each session so you can make the best moves.
The Best Time for Forex Trading Sessions in Nigeria
Knowing the global time zones is the first step to figuring out the best forex session in Nigeria. To find the ideal session for you, you must first know what type of trader you are. For example, are you a day trader or a night trader? Depending on which category you fall into, the best hours to trade will differ.
Day traders live by the rule of ending their day without any open positions. To prevent profits from turning into losses overnight, they close all positions by the end of the day.
On the other hand, overnight trading takes place outside of regular market hours. Night traders buy and sell stocks, commodities, and other currencies or financial instruments during the hours a market is closed. Some brokers that allow overnight trading may even extend after-hours trading sessions to the next day when particular markets reopen.
Overnight trading is ideal for traders who have a day job and don’t have time to watch the market during typical hours.
Once you’re familiar with the different Nigerian trading sessions and the different time zones and established what type of trader you are, you can determine the best time to make your trades.
The Best Time for Day Trading in Nigeria
The next element to look at is trading pairs. Different trading pairs are worth more at different times of every trading session. For some currency pairs, the best time to complete a trade is during a period of overlap between two sessions.
The goal of every trader is to get the most out of every transaction. To do this, you need to find a strategy that works best for your goals and currency pairs.
One of the most used forex trading strategies is intraday trading, which is shorthand for “within the day.” This strategy often refers to trading common stock and ETFs during a single day. Traders can also use intraday to describe the highs and lows of security prices during a particular session on that day.
Day trading or intraday trading is ideal for most traders because securities aren’t affected by overnight developments. Volatile changes that take place overnight can eradicate the value of positions that were doing well during the day.
Seasoned forex traders in Nigeria utilize various intraday strategies to make big profits. Many of those strategies revolve around global trading sessions. A majority of day traders complete trades between 10:15 AM and 2:30 PM because volatility is at its lowest point for the day.
The Best Time to Stop Trading in Nigeria
Good traders don’t only know the best times to trade, they also know the best times to stop trading. Another important aspect of trading in knowing when it’s time to end your forex trading session in Nigeria. Although trading sessions may still be open, your session for the day may need to end early to prevent major losses.
One strategy many traders utilize to better manage their losses is placing stop-loss orders. This common risk-management tool automatically sells the security of your choice once it reaches a certain price on the market. This can be listed as either a dollar amount or a percentage.
The purpose of stop-loss orders is to limit losses if the security of your choice drops below the price level you set for the transaction. Stop-loss orders are executed by determining the highest amount you’re able to leverage to fulfill your goal profit without going over your limit.
There are other strategies traders can use to mitigate the risks of their trades, but the risk-reward system that comes with stop-loss orders is the best way to minimize the cons without forfeiting the pros.
In addition to these strategies, creating an overall limit for each trade or day can help prevent losing more money than you can afford. All transactions on the forex market come with risk. It’s your responsibility as the trader to set and follow boundaries to keep your capital safe.
FAQ (Frequently Asked Questions)
Is Forex Trading Legal in Nigeria?
Yes, forex trading is legal in Nigeria. However, forex trading is not currently regulated in Nigeria. As a result, traders trade at their own risk. Luckily, there are foreign brokers regulated by Tier-1 and Tier-2 regulatory bodies that Nigerian traders can trade with.
What Are the Most Popular Forex Pairs in Nigeria?
A majority of Nigerian traders favor EUR/USD and USD/JPY, making these two currency pairs the most popularly traded in Nigeria. But traders interested in less volatile pairs often choose GBP/USD or AUD/USD instead.
What Are the Most Popular Forex Brokers in Nigeria?
HotForex (HFM), FXTM, and IC Markets are three of the most popular forex brokers in Nigeria. However, there are many other brokers to choose from depending on your preferences, skill level, and the financial instruments you trade with.
What Time Does Trading Begin in Nigeria?
Forex trading sessions in Nigeria begin at 11 PM on Sunday and then close at 10 PM Friday every week. During this time, various forex trading sessions are live.
When Is the Best Time to Trade Forex in Nigeria?
In Nigeria, the best time to trade forex is between 2 PM to 6 PM every day when the London and New York trading sessions overlap. However, many day traders complete trades between 10:15 AM and 2:30 PM because volatility is at its lowest point of the day.
The forex market is separated into four global trading sessions that are staggered to give traders a 24/7 trading experience that begins and ends at different times depending on where you’re located.
The best time to trade currency pairs depends on several factors, from the time of day to the currency pair you’re trading with. Traders can improve their strategies by keeping up with the different time zones of the major sessions. There are even points in the day when the two largest markets – London and New York – overlap to create the busiest time of the day in the forex market.
Knowing what points of the day make the best Forex trading sessions in Nigeria will help you become a more confident and skilled trader. And if you ever forget what time a market opens or closes in local Nigerian time, you can always do the math or use a Forex time zone converter to find out.