Trading the currency that is awake

[Fairman]

Trading the currency that is awake

A pair has two currencies, and each has a home time zone. When one of them is awake and the other is asleep, the pair is driven by the active side.

In Asia, the yen, Aussie, and kiwi are awake. During the London morning, the euro, pound, and Swiss franc take over. In the US afternoon, the dollar and Canadian dollar dominate.

Picking pairs where one or both currencies are in their home session often yields better liquidity and cleaner moves. EURGBP in London, AUDJPY in Tokyo, USDCAD in New York.

Pairs where both currencies are asleep, like EURCAD at 2am London time, tend to be thin and jumpy.

The approach turns the day into a rotation. Start with Asian pairs, shift to European, finish with North American, instead of trading the same pair all day regardless of its conditions.

It also provides a natural reason to stop. When the favoured currencies go to sleep, so does the trading.

A rotation plan written on one page, listing the pairs for each window, removes the question of what to trade from the live session altogether.

Which currencies seem to move best in their own home hours?