FOREX Trading Times
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. 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.
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.