When to do Currency Trading
Can you tell me the most effective time to do currency trading? Read this excellent article about Best Day and Time for Forex Trading. Unlike stock trading, the forex trading market is open 24 hours a day during the 5 business days. However this doesn’t imply that the foreign exchange market is getting the same number of trades or price variations throughout these days. There is much more business on the currency trading markets at specific times of a day and normally, the best times to trade are when the markets are busiest.
The two biggest trading floors for foreign exchange are UK and the US markets. Although the Great Britain does not use the euro, a good number countries in EU are within 1 hour time difference from the Great Britain, as is Switzerland. US time zones also include Canada. So between the US and UK sessions cover most of the major currencies that are exchanged.
The United Kingdom market begins at 8.00 UTC and finishes at 16.00 UTC. The currencies that are mainly involved during this Fx market are the euro (EUR), British pound (GBP) and US dollar (USD) which is involved in the majority of currency trades.
The New York trading session starts at 13.00 UTC (8.00 EST) and ends at 22.00 UTC (17.00 EST). The most traded currencies during this trading session are USD, EUR, GBP, AUD (Australian dollar), JPY (Japanese yen) and CAD (Canadian dollar).
The max out trading hours, as you guessed, is for the period of three hours when these 2 foreign exchange centers overlap and the trades are live in both London and New York. This time frame runs from 13.00 to 16.00 UTC (8.00 to 11.00 EST).
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If you are a person who like to let the orders run over a number of days or would like to use a software similar to Forex Derivative it may not create too much difference to know the peak times on the currency trading markets. But if you are active in day trading forex where you have to open and close a trade within a few minutes, you will see a large number of opportunities coming up during the above mentioned hours. And many a times doing the trade by yourself during this time period can beat the Forex Autopilot which is the best currency trading robot.
In case you are involved in a cross rate, i.e. a forex pairs that do not involve the US dollar, you may have another trading time when the forex centers in the 2 countries are open for trading.
Imagine if you are forex trading in AUD/JPY you may find that trading was busiest during the Asian session. The Japan and Aussie trading hours are very close and on a day when activity was anticipated you might find some money making trades during the overlap. However, usually this is a slower Fx market for just about all currencies.
So the best time for most Fx traders is during that three hour time period in the morning in the US and the afternoon in London and Europe, when the forex trading markets are live on both sides of the Atlantic. Business can be frantic during those hours, there is high liquidity and the currencies move far and fast. A number of important financial news is released during this timw too, especially toward the starting. So this time period is the best forex trading times if you want to get quick gains.
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