Trade Foreign Currency: What’s The Best Time?
What’s the best time to trade foreign currency?
Should you be serious about being profitable using forex currency trading, you will have to know the best time to trade foreign currency. Oh and if you are not focused on the idea, you probably should not be becoming involved at all.
Trade Foreign Currency: Trading Hours
Forex currency trading is not without risk and there are lots of things that you need to know before you start forex day trading for real. Generally the best plan for a beginner is to get in to the practice of forex trading during a number of the busiest periods. You should not look for quiet times hoping to make a big break when nobody else is about. It just does not occur like that and you might be caught out.
Better to go along with the crowd at the same time when you can be more certain of being matched at a good price for both your opening and closing deals.
The answer is the overlap between the London and New York forex trading hours. London is actually the busiest currency trading floor, with New York second. London business hours are good for trading on the euro, British pound and Swiss franc, since most of the major countries using these currencies are within one hour time difference from Britain.
New York of course is the home of the US dollar, the most traded currency, and the time zone also covers Canada. Expressed in British time (the same as UTC in winter), trading starts in London at 8.00 am and finishes at 4 pm, while trading in New York starts at 1 pm UTC and finishes at 9 pm. Therefore the overlap is from 1 pm to 4 pm British time. Expressed in New York time (EST), the overlap is from 8 am to 11 am. That is when the forex market is busiest on practically every day.
Trade Foreign Currency: Time Zones
Of course those hours may not be ideal for everybody. If you live in one of those time zones and want to trade foreign currency outside of normal business hours when you may be working another job, you will certainly have the opportunity.
If you live in Europe you can trade in the evening when the New York market is still open, and if you live in the EST time zone you may find a busy time for that pair based on the business hours of their two countries.
For example the AUD/JPY pair can be reasonably busy during the Asian session when Australian and Japanese business hours overlap. However, even on these pairs there is usually more activity if you can also overlap with US or British trading times. Long term traders who may leave a trade open for several days or weeks will be less constrained by the peak trading times. For day traders, however, it is important to be able to slip in and out of a very busy market if you want to profit from forex scapling strategies. So it is also important to take into account how you plan to trade foreign currency.
