The Forex market is a 24 hours trading market because of the different time zones of each of the trading sessions. While the market session you are trading in, might just have started its activity on a Monday morning, it could be nighttime where you are trading from. This can translate into quite a mess for a newbie trader or one who hasn’t done his/her homework on Forex trading markets.
If you’re looking at every data release and following the activity of different markets five days a week, you can soon experience a burnout. However, this can all be handled effectively if you know your goals and the dynamics of the market hours. It can help you develop a trading schedule resulting in enhanced profits. Let’s find out how you can achieve this:
The Best Time to Trade
If you think there is a best time to trade, there isn’t. You will have to put in some work and understand the differences in time zones and hours of the market to realize what could be the best time to trade for you. The week for currency trading begins at 6 pm EST on Sunday and goes on till 4 pm on Friday.
However, here is a hint to gauge the best time of the day to trade: when a market is most active. The trading atmosphere is heightened when more than one market is open simultaneously, resulting in greater fluctuation in currency pairs. If you trade when only one market is open, you can expect currency pairs locked in a tight spread. Let’s briefly review the four markets and their operating hours:
Sydney: Trading starts with the start of a Sydney session at the beginning of the week and it sees a lot of action after the close of action on Friday afternoon, individual traders, as well as financial institutions try to stabilize their positions. This trading market operates from 5pm to 2 am EST.
New York: With the close of the New York session at the end of the week, trading usually comes to an end and it is one of the most heavily watched markets by foreign investors, as the US dollar is involved in a majority of the trades. It is open from 8 am to 5 pm EST.
Tokyo: Tokyo is Asia’s largest trading market in terms of volume with Singapore and Hong Kong following soon after. Some of the currency pairs that get a lot of action and those which you can aim for include USD/JPY, GBP/JPY, and GBP/CHF.
London: London roughly accounts for 34 percent of global trading, making the UK the most dominant market in the world. Due to the influence of the Bank of England on interest rates and the monetary policy of GBP, it has a lot of influence on currency fluctuations. Technical traders should keep the London market in mind when looking for Forex trends. It operates from 3 am to 12 pm EST.
Try to trade in times when market hours overlap as it provides an opportunity for higher price ranges. For more Forex trading, tips, news and to kick-start your trading from home, visit ETX Capital.
