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FOREX Trading Times
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Many new Forex
traders don’t realize that it is crucial to know when
the best time to trade Forex is. One of the advantages of Forex is that
it is possible to trade around the clock as trading takes place all
around in the world, twenty four hours a day.
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This is a benefit for those who are working
during the day and cannot monitor the stock market closely, as the
Forex market is open in the evening. However, it is important to know
that the Forex market works differently depending on the time of the
day and the currency.
Forex is traded around the world, in three major regions, the U.S.,
Europe and Asia. A day of trading Forex is broken into three trading
sessions, based on the work day of the major city in the region. New
York is the major Forex trading location in the U.S, London in Europe
and Tokyo for the Asian region. As it can become confusing with time
zones in different countries, GMT (Greenwich Mean Time) is commonly
used to refer to Forex trading times. Although the times may vary
slightly in Summer due to Summertime, the Asian region is the first
trading session starts at approximately GMT 0:00 and finishes around
eight hours later at GMT 8:00. Trading in London begins around GMT
07:00 and ends around GMT 16:00. Lastly the U.S starts trading at GMT
13:00 and ends around GMT 22:00.
Although all currencies are trading in each session, certain currencies
are more active in a particular session. The Japanese Yen (JPY) is
generally more active in the Asian session, as traders in Tokyo are
dealing on behalf of Japanese banks and companies during the Japan work
day. The Euro (EUR) and Pound (GBP) are most active in the European
session. In the U.S trading session, all of the major currency
pairs are active. The most active time however is when the European and
U.S sessions overlap. There is a period of a few hours when traders in
London and New York are both trading and this is when there are often
large movements in prices.
To profit in Forex trading, it is important to understand when there
are likely to be movements in the currency and these are based on the
forex trading times. If you trade a currency that is typically quiet
during the time you are trading, there will be less movement and less
opportunity to find successful profitable trades. Follow the currency
that you would like to trade for a few days and notice the typical
range and volatility during the different trading sessions. This will
give you an idea of the best times to trade.
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