Choosing the time you want to trade on the stock exchange is relatively easy. The market is open for a limited number of hours and is closed on weekends. You have a limited amount of time to decide which trades you want to review and which positions to take. It’s a little different with the forex market. The forex market is permanently open throughout the trading week, which means you can trade at any time of the day. For newbie traders, this can be quite daunting as they don’t want to miss out on a huge opportunity but at the same time, they need to sleep like the rest of us.
There are some things you may want to consider regarding time zones in the forex market that will be helpful for those in FX trading = currency trading. From the opening hours of various markets to the best times to trade, you’ll find important forex market information below.
Forex market hours
The first thing you need to know about the different forex markets you can trade is their opening hours. Speaking of Eastern Standard Time (EST), here are the major forex markets and the hours they are open for trading. New York is open from 8 am to 5 pm (EST) and ranks second on the list of largest foreign exchange markets. The US dollar accounts for about 90% of all transactions in this market, which attracts a lot of attention from around the world. If there is a big move in the stock market, it will have a big impact on the dollar and people will watch the currency play through the forex market.
Tokyo is open from 7pm to 4am (EST) and is the biggest player in trade in Asia. While the Japanese market was the only one open, several currency pairs received a lot of attention, including USD/JPY, GBP/JPY, and GBP/USD. The Bank of Japan is known to strongly influence the market. This is why people like to keep an eye on the Japanese markets to find opportunities for various Japanese currency pairs in the forex market.
The Sydney market is open from 5pm to 2pm Eastern Time and ranks last on the list of largest markets. People flock to Australian markets around noon on Sunday as financial institutions and traders prefer to consolidate and start the new week early. There is a lot of action during this period, which means greater volatility and more opportunities to capitalize on the forex market.
The London market is open from 3 am to noon. London plays an important role in the movement of the foreign exchange market thanks to institutions such as the Bank of England and central banks headquartered in London. These banks control interest rates which greatly affect the value of currencies worldwide. Trends that appear in the forex market often start in London, which attracts a lot of attention in this market, as traders look for the next trend to move so that they can play as soon as possible for maximum profit.
Best time to trade forex
Simply put, the best time to trade the forex market is when the market is most active. In fact, the market is the most volatile and the price variation of the currency pair is the most significant. This opens up increased opportunities for trading with higher returns. Generally, the forex market is open from 5pm EST on Sunday and closes at 5pm the following Friday.
Different markets around the world open and close at different times, resulting in overlap if two markets open at the same time. It is during these overlaps that the market will be most active and hence the best time to trade. Price fluctuations will be greatest at this time, meaning games with higher potential payouts will be more likely to be played.
There are three important overlaps in each trading day that you should be aware of. The first is between the London market and the US market, which is from 8am to noon. The second is between the Sydney market and the Tokyo market, which is between 2pm and 4pm (EST). The final overlap between the major markets is London and Tokyo, between 3 and 4 PM ET. These times are considered the best time to trade in the forex market, as this is when the market is most active. Successful traders focus on these time slots to complete a large number of their trades.