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Optimal Foreign Exchange Trading Periods - When It Is Really Wise To Be Active In Foreign Exchanges?
So what are the ideal foreign exchange trading times? The forex market is open round the clock throughout the business week, but this does not automatically mean that all of those 24 hours are good for trading activity. There is a lot more activity on the forex markets at certain times of the day and typically the appropriate times to benefit from trading are when the markets are most active.
The two largest exchanges for currencies are London and the US markets. Although the UK does not use the euro, most euro lands are within 1 hour time difference from the UK, as is Switzerland. US time zones also normally include Canada. Therefore the London session and the US session between them include most of the key currencies that are traded.
The London session starts at 8.00 UTC and ends at 4 p.m. UTC. The currency pairs that are most busily traded during this session are the Euro, British Pound and US Dollar which is engaged in the vast majority of all deals.
The US session gets started at 1 p.m. UTC (8.00 EST) and finishes at 22.00 UTC (17.00 EST). The primarily traded currency pairs during these times involve USD, the Euro, GBP, AUD, JPY and the Canadian Dollar.
The most active trading time, as you would anticipate, is within the 3 hours when these two sessions overlap and the currency exchanges are active in both the UK and the US. This period runs from 1 p.m. to 16.00 UTC (8.00 to 11 a.m. EST).
If you like to let your orders run over several days it may not make that much difference to you being aware of the busiest times on the exchanges. But if you are involved in day trading forex where you may open and close a trade within a few minutes, you will find most opportunities occurring within the busiest hours.
If you are involved in a currency cross, i.e. a currency pair that does not involve the USD, you may have another window of time when the financial exchanges in both countries are open for trading.
For instance if you were trading AUD/JPY you might find that market activity was good during what is called the Asian session. The Australian and Japanese business hours are rather close and on a day when activity was anticipated you might find some lucrative trades within the overlap. However, typically this is a slower trading time for most currencies.
Therefore the most beneficial time for most foreign exchange traders is during that three hour window in the morning in the United States and the afternoon in the United Kingdom and Europe, when the markets are most active on both sides of the Atlantic. Trading can be frenzied during those hours, there is maximum liquidity and the currencies swing far and fast. A lot of the important market news is broadcasted during this period too, mainly toward the beginning. So these hours are the best currency trading times if you want to grab quick profits.
Whatever the time zone you are trading in, you need to have a profitable forex trading system. If you don't have an own strategy, use forex signals from an accurate forex signal provider. This way you can make money in any markets and any time.
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