Time to Do Currency Trading
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Is there a specific time to trade forex? I found this excellent guide about best forex times. Different from share market, the currency trading market is open round the clock during the 5 business days. But this doesn’t mean that the currency trading market is enjoying 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 generally speaking, the best times to trade are when the trades are most active. We could trade round the clock, 5 days a week without worrying about time if you utilize a software like Forex Derivative System or a forex trading EA like Forex Autopilot online.
The two major trading floors for currency trading are London and the US markets. Though the UK does not use the euro, most European countries are within 1 hour time difference from the UK, as is Switzerland. American time zones also comprise Canada. So the London session and the US session between them cover most of the key currencies that are traded.
The UK currency exchange session starts at 8.00 UTC and closes at 16.00 UTC. The foreign exchanges that are primarily active during this currency exchange session are the euro (EUR), British pound (GBP) and US dollar (USD) which is involved in the majority of forex trades.
The USA currency exchange session opens at 13.00 UTC (8.00 EST) and closes 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 most active trading hours, as you can see, is for the period of 3 hours when these 2 sessions overlap and the trades are open in both London and USA. This period runs from 13.00 to 16.00 UTC (8.00 to 11.00 EST).
If you like to let the orders run over many days it might not make so much difference to identify the peak hours on the currency trading markets. But if you are involved in day forex trading where you might open and close a trade within a short period of time, you will see most opportunities coming up during the most active hours.
In case you are dealing with cross rate, i.e. a forex pairs that do not involve the US$, you may have another trading time when the currency exchange centers in your two countries are live for business.
Let’s assume if you are forex trading in AUD/JPY you will see that trading was maximum during what is called the Asian session. The Japan and Aussie business hours are pretty close and on a day when trading was expected you might find some money making trades during the overlap. But, So the best time for most traders is during that 3 hour window in the early hours in the US and the afternoon in England and Europe, when the currency trading markets are live on both sides of the Atlantic. Trading can be frantic during those hours, there is utmost liquidity and the currencies are volatile. Many of the important financial news is released during this time too, especially toward the beginning. So this window of time is the best currency trading times if you want to grab quick profits.
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