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Best Time to Trade Forex in Nigeria

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Authorised Forex Traders

If you wonder when it’s best to trade Forex to get the best results and what the best hours to maximize your returns are, this article is for you. Read on to get the answers to these questions and find out the best trading hours.

While it can be a matter of personal preferences when to trade, and you can allocate your time depending on your daily schedule, let’s see when it’s best to enter the market to make higher profits and when it’s best to keep off trading.

Best days to trade Forex

You may have noticed that on some particular days, markets move more actively than on others. Take a look at the table below and check out the average volatility in pips for three major currency pairs (EUR/USD, GBP/USD, USD/JPY) depending on the business day:

Trade Forex in Nigeria

As we can see, all three pairs register the highest volatility on Tuesday and Wednesday. With that in mind, we recommend entering the market during periods of high market volatility. This way, you’ll be able to take advantage of more trading opportunities and maximize your profit.

Trading sessions

Now that we’ve figured out the best trading days, let’s talk about the most favourable trading time. Trading in the foreign exchange market takes place 24 hours a day five days a week. However, currency pairs can move at a different pace at different times. Although Forex is a decentralized market, a significant amount of money comes from banks, and they stick to a certain schedule.

Forex trading sessions can be divided into four major groups:

  • North American (New York)
  • Asian (Tokyo)
  • European (London)
  • Pacific (Sydney)

Best time to Trade Forex

At the beginning of every session, the currencies are gaining momentum:

During the European session, all pairs containing the euro and the pound sterling demonstrate high volatility, with EUR/USD, EUR/GBP and EUR/CHF showing the largest trading volumes. Very often, the trend can commence in the European trading session and continue into the American session.

In the American session, the pairs containing the US dollar are on the rise: EUR/USD, USD/CHF and USD/JPY. During this time, the Canadian dollar, the USD/CAD pair, comes to life. During the American session, the trend may reverse. Besides, important economic reports are generally released in the evening. Those can trigger volatility spikes in currency pairs that include the US dollar.

In the Asian and Pacific session, the pairs containing the Japanese yen and NZD/USD are especially active. Throughout the night session, the market is tranquil since US and European banks are closed. The volatility is low, so the price often fails to gain momentum and break any key levels. So, the market is usually flat with the price trading within the range. For this reason, most traders prefer not to trade at night.

Best intervals for day trading

9.20 – 9.50 – The beginning of the European session. Trading volume is significant. While this trading interval offers a lot of trading opportunities, it’s highly risky as well. If you are a novice trader, we suggest that you don’t rush into the market at this point. Wait till the volatility settles a bit.

9.40 – 10.10 – Trading volumes are still significant, the quotes are moving fast, liquidity is sufficient. Now that the situation has already stabilized, it’s the perfect time to enter the market and place your orders.

10.25 – 11.10 – Volatility decreases, market participants lock in their profits and close their trades. This time interval is the best to start scheduling your next trades.

11.15 – 14.15 – Most breakouts occurring during this period are very inaccurate. Prices start moving sideways. Feel free to take a break. It’s best that you refrain from trading at this time.

14.10 – 15.25 – Most trends have already formed. There’s no sense in opening your trades now. But if you do, trade with the trend and be vigilant. Around 15:30, the trend may pause or even reverse.

15.20 -16.00 – The last 30 minutes of the day session, major market participants start adjusting their portfolios. It may seem that high volatility can bring you some good profits, we’d recommend staying on the safe side as the trading environment is too unpredictable now. Avoiding and managing risks is part of smart trading, remember?

All in all: The usual best trading time is 8 a.m. to 12 a.m. – it’s when trading hours of the New York and London exchanges overlap. These two trading hubs account for more than 50% of all Forex transactions.

When you SHOULD NOT trade

It’s funny how everyone is looking for the best time to trade. And few people think when it gets too risky to trade and when it’s better to avoid the market. It’s highly undesirable that you enter the market on:

  1. By the end of the week, we all get tired and tend to make illogical decisions. It can be hard to predict market behaviour at the end of the week. Friday is one of those days when the majority of traders suffer losses. Some traders lock in their profits to safely leave for the weekend. Others, on the contrary, jump into the market to make quick money. Prices start going up and down, especially in the afternoon, which can result in substantial losses.
  2. Banks are usually closed on holidays, market activity is low. On holidays, the risk of losing your deposit increases. You might be hoping for a spike in prices after the holidays, but the market likes to make adjustments. And they are usually not in your favour.
  3. News releases. We are going to offer you some obvious advice that no one takes anyway: do not trade the news. You can’t predict with 100% accuracy where the price will move after the release of significant news, a statement or a report. At this point, the price movement is often chaotic. So, we recommend exiting the market 1.5 hours before the publication. Refrain from trading for about the same amount of time after the news is released.

Summing up

While Forex is open around the clock, all traders are human beings who need their rest. That’s why it’s essential to know the trading sessions schedule and market hours that determine volatility peaks. Enter the market when it demonstrates a strong momentum. This way, you’ll be able to monitor price developments better and identify trading instruments with the highest profit potential.

Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan. Mr Olowookere can be reached via dipo.olowookere@businesspost.ng

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Economy

NEM Insurance Seeks Regulatory Approval for Share Reconstruction

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NEM Insurance

By Dipo Olowookere

The board of NEM Insurance Plc is seeking regulatory approval for its proposed share reconstruction, a notice from the Nigerian Exchange (NGX) Plc has confirmed.

Ms Lilian Dako, who signed the disclosure on behalf of the Head of Listings Regulation Department at the NGX, said the underwriting firm filed its application through its stockbroker, Apel Asset Limited.

NEM Insurance intends to redenominate the nominal value of its stocks from 50 kobo to N1 and then turn every two shares of 50 kobo into one share of N1.00 each.

At the moment, the total authorised shares of the company stand at 10,400,000,000 units of 50 kobo each but this will change to 5,200,000,000 units of N1.00 after the exercise.

However, the authorized share capital will remain at N5.2 billion both before and after the share reconstruction, according to the statement.

“Following the resolutions passed at the Annual General Meeting (AGM) of NEM Insurance Plc on June 24, 2021, trading license holders are hereby notified that Nigerian Exchange Limited has received an application from Apel Asset Limited for a proposed share reconstruction of NEM Insurance Plc.

“The share reconstruction involves redenomination of the nominal value of the company’s shares from N0.50 to N1.00, resulting in the consolidation of every 2 shares of N.50 each held in NEM Insurance Plc into one share of N1.00 each.

Analysis of the Company?s share capital, pre and post share reconstruction, is provided in the table below:

Details Pre Share Reconstruction                                      Post Share Reconstruction

Authorized share capital (N)    5,200,000,000                   5,200,000,000

Issued Share Capital (N)          5,016,477,989                    5,016,477,989

Nominal Value per share (N)   0.50                                   1.00

Total Authorized (Units)          10,400,000,000                  5,200,000,000

Total Issued Issues (Units)       10,032,955,535                  5,016,477,989

“Further information regarding the share reconstruction will be communicated in due course,” the notice from the exchange today stated.

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Economy

OPEC Extends Compensation for Nigeria, Others to June 2022

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OPEC Crude

By Adedapo Adesanya

The Organisation of the Petroleum Exporting Countries (OPEC) has extended the compensation period for defaulting countries in the ongoing oil cuts until June 2022.

This was contained in a statement by the group’s Secretariat, which noted that the extension was granted following requests by some of the underperforming countries.

Nigeria is one of the defaulters and the Vienna-based cartel had previously extended the deadline to submit their compensation plans latest by December 17.

The group reiterated the “critical” importance of adhering to full conformity and to the compensation mechanism.

For some of the countries involved in the Declaration of Cooperation, DoC had defaulted at trimming their cut quotas at some point in the agreement.

Reaffirming the decision of the 10th OPEC and non-OPEC Ministerial Meeting, ONOMM held on April 12, 2020, and July 18, 2021, the overall monthly production adjustment plan was adjusted by 400,000 barrels per day for the month of January 2022.

The group reaffirmed the continued commitment of participating countries in the DoC to ensure a stable and balanced oil market.

The biggest concerns were whether the emergence of a new variant of the coronavirus might torpedo the budding global economic recovery, and the restiveness of the United States and key Asian customers, including China, over high oil prices.

The 24th OPEC and non-OPEC Ministerial Meeting will be held on January 4, 2022.

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Economy

FarmTime Gets $50,000 to Boost Organic Fertilizer Production

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FarmTime Organic Fertilizer Production

By Dipo Olowookere

An agric-startup based in Tanzania, FarmTime Company Limited, has become the latest beneficiary of a new revenue-linked matching fund designed to incentivize investors to back younger entrepreneurs.

The firm, which was established in 2017 to recycle and repurpose plant and animal waste to produce organic fertilizers, delivering consistent and traceable nutrients at affordable prices, has secured a $50,000 funding support to expand its operations.

FarmTime, a new entrant to the organic fertilizer market in Tanzania, obtained the fresh capital in a round led by Umsizi Fund, which triggered a guaranteed match from the Young Entrepreneurs Fund (YEF).

YEF was launched in 2019 and provides matching investments of up to $50,000 to qualifying entrepreneurs. To date, over $250,000 has been invested across Africa with a growing pipeline of opportunities.

The scheme was designed to incentivise investments into very young entrepreneurs in Africa. It is a “guaranteed follow” fund that will match investments into ventures led by graduates of African Leadership Academy (ALA) programs, including The Anzisha Prize.

Rather than take equity positions, the fund has very intentionally chosen an innovative debt model with variable repayments linked to company revenues.

The founder of the latest beneficiary, FarmTime, Mr Jubilate Lema, disclosed that the new funds would be used to develop solutions to food security that balance human prosperity and the environment at large.

“I hope more funds take the approach of Umsizi and YEF with a revenue-linked debt instrument,” says Lema, “It was easy to understand, doesn’t load our cap table, and forced us to think about cash flow as well as growth.”

Josh Adler, Executive Director of The Anzisha Prize, which manages the fund on behalf of ALA, while commenting, stated that, “YEF is part of a growing move toward more structured exits from investors with a patient capital mandate.

“As a leadership development institution, ALA is able to draw in new forms of support for exceptional young leaders like Jubilate through the fund without having to build investment capabilities internally.”

As for Ed Brakeman from the Umsizi Fund, he said, “This one of the more exciting investments for us in some time with a revenue-linked loan in partnership with YEF.

“We’re eager to support FarmTime’s growth and are confident that we as investors will see returns while ensuring support for the business through the challenging period of product launch and revenue ramp-up.”

Since its inception five years ago, FarmTime has invested in research and product development, licensing and setting up a factory. It has already processed approximately 9,000 kilograms of coconut husks, 2,600 kilograms of fish waste, and 76 kilograms of seaweed, amongst other inputs.

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