What Are The Best Hours For Forex Trading?
Carl's 2 Cents:
I am a short-term trade and may
hold a position from 1 day to a week. So I
don't trade based on regional markets.
However, if you are a day trader and do not hold
a position over night, market hours, volatility,
and liquidity do matter.
Forex is a highly dynamic market with lots of price oscillations
in a single minute, this characteristic of the Forex market
allows traders to enter the market many times a day and pull
some profit from these number of trades. If you want to find an
appreciable number of profitable trades you need to enter the
Forex market at the best period of time, i.e., when the
activity, the volume of transactions, is the highest.
The main timing characteristics of the Forex market are the
following:
* Forex is 24 hour market - It starts from Sunday 5pm EST
through Friday 4pm EST. Rollover at 5pm EST * Forex Trading
begins in New Zealand, followed by Australia, Asia, the Middle
East, Europe, and America * The US & UK account for more than
50% of the market transactions * Forex Major markets: London,
New York, Tokyo * Nearly two-thirds of NY activity occurs in the
morning hours while European markets are open. * Forex Trading
activity is heaviest when major markets overlap.
From this timing facts, it is quite visible that at any given
time, somebody somewhere in the world is buying and selling
currencies. As one market closes, another market opens. Business
hours overlap, and the exchange continues as day becomes night
and night becomes day. The great liquidity of Forex, combined
with a market that's traded 5.5 days a week around the world,
offers you an exceptional independence and choices to trade
Forex when you want to and not when the market wants you to do
it. Trades always develop with relatively the same frequency,
regardless of time. As long as the Forex market is open, there
is about the same probability that you will find a trade,
whenever your look for it.
During each trading day, the total Forex "volume" is determined
by the number of markets that are open and the times each of
these markets overlap one another.
Forex market volume of transactions remains high during the
whole day, but peaks highest when the Asian market including
Australia & New Zealand, the European market and the U.S.
market are open simultaneously. And these are the trading hours
you must target in order to find the highest possible amount of
profitable trades.
This is the breakdown of OPEN Market Times for your reference:
* New York Market trade times: 8am-4pm EST * London Market trade
times: 2am-12Noon EST * Great Britain Market trade times:
3am-11am EST * Tokyo Market trade times: 8pm-4am EST * Australia
Market trade times: 7pm-3am EST
If you pay attention to the last schedule you will notice that
there are two times when two of the major markets overlap during
trading hours; between 2am and 4am EST (Asian/European) and
between 8am to 12pm EST (European/N. American).
So here you have it, if you want to find a great number of
profitable trades, focus on the hours when the markets tend to
make their biggest moves, i.e., during these big markets
overlaps, which therefore, are usually the Best Times to Trade.
Written by: Adrian Pablo
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