Trading in the Forex market is exciting and offers the serious currency trader the potential to make some serious cash. If you are not familiar with the term, Forex, then let me explain. Forex is a foreign exchange currency market where one currency, say USD (United States Dollar), is traded for another, like EUR (European Dollar). The currency traders are trying to take advantage of any movement or fluctuations in exchange rates between a pair of currencies, called a single product, to make a profit.
The Forex market is one of the largest markets in the world. There is no inside information and movements between pairs of currencies is due largely because of monetary flows and macroeconomic conditions throughout the world which is viewed as real-time news.
The market is open 24 hours a day and this makes it easy for the traders to trade at any time that is convenient for them, day or night. As in any market there are trends that are used to predict when a period of high trading volumes might occur, but beware this is not an exact science and can have disastrous ramifications if you treat it as such. Traders confer that a good time to trade is when overlapping of trading sessions, between two markets, occur. This is a time when the currency market can be most active when anticipation of large volume of trades will occur. The following is a list of Forex trading hours (times):
In London from 3:00 am to 12:00 noon Eastern Standard Time (EST)
In New York from 8:00 am to 5:00 pm EST
In Sydney from 5:00 pm to 2:00 am EST
In Tokyo from 7:00 pm to 4:00 am EST
Now, we find the hours when two sessions overlap:
Between London / Tokyo – 3:00 am to 4:00am EST
Between New York and London – 8:00 am to 12:00 noon EST
Between Sydney / Tokyo – 7:00 pm to 2:00 am EST
So, if you’re trading the currency pair EUR/USD a good time to trade, where anticipation of a high number of trades (volume), would occur between 8:00 am and 12:00 noon EST when these two markets are open at the same time. Furthermore, since a trading market is always open somewhere in the world all world currencies can continue to be traded.
Whether you’re a seasoned pro or a newbie to the Forex currency market it can be advantageous to pay close attention to timing indicators and other strategies to enhance your chances of being successful in the Forex currency market.