October 17, 2013

Best Time for Foreign Exchange Trading

foreign exchange trading

Choosing the best time for foreign exchange trading is important if you want to earn consistent profits. Although the forex market is open all through the day there are certain trading times that are considered the most favourable, and when you place a trade during these times you may be able to earn regular returns on your investments.

Except for weekends and holidays, the foreign exchange is open on all five days a week. You may be able to place a trade twenty-four hours each day in any of the exchanges that are open. A typical trading day starts in New Zealand followed by Australia, Asia, Europe and then the United States of America. Irrespective of whether you are a beginner or experienced trader, you need to gain knowledge about the best times to trade so that you can earn good profits.

What is the best time for foreign exchange trading?

The three major forex markets for foreign exchange trading are Tokyo, London and New York. The trading time of the Australian forex exchange is 07:00PM – 03:00AM, Tokyo 08:00PM – 04:00AM, London 02:00AM – 12:00AM and New York 08:00AM – 04:00PM.

The trading times of the forex exchanges overlap and it is during these times that currency pairs are traded actively. The overlapping trading times of the New York and London exchanges is 08:00AM – 12:00PM, Sydney and Tokyo 07:00PM – 02:00AM and London and Tokyo 03:00AM – 04:00AM.

As a trader it is important that you are aware of the best and worst times to place a trade. This can help in minimising losses and maximising profits. It is best to enter the market when the largest volume of transactions is done for the day so that you are able to benefit from it.

The best trading times may also vary depending on the currency pairs that you choose to trade. The best time for trading USD/EUR and USD/GBP is 08:00AM – 12:00PM. Similarly, other currency pairs also have their best trading times and if you want to be a successful trader, you need to become aware about them so that you may be able to time your trade in an effective manner and make good profits.

Tips to choose the best time for foreign exchange trading

If you want to be a successful trader, it is not necessary that you should place multiple trades all through the day. If you look at successful traders, you may become aware that they choose specific times of the day to trade. It is advisable to study the forex market so that you become aware of how to time your trade in an effective manner.

You should avoid placing random trades all through the day as it can only increase the risks of trading. After you become aware of the best time to trade, you can set a trading schedule so that you are able to trade successfully. It is best to place a trade when multiple exchanges are open for trading. As there is greater fluctuation in currency pairs during this time, you may be able to maximise your profits easily.



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