Forex market has an advantage over the stock market – it operates 24/6; whereas
the stock and commodities market operates 24/5 (Monday through Friday) normal
business hours. Forex market continues its activity around the clock. If you
want to trade at 2:00 am EST Monday morning, feel free to place your trade. If
you would like to invest at 9:00 pm Thursday night or whenever you have the
time to trade just place your trade. However, even though the market is
considered a 24-hour market, it's important to know when the market is actually
active and when is the best time to place a trade on the market.
Actual operating hours:
Forex market is open
24 hours a day, each financial centre (i.e. New York, London, Frankfort, Tokyo,
and Australia) has its own operating hours, which are usually from 8:00 am -
4:00 pm, local time. That means if it's 8:00 am (Tokyo time) on Monday morning,
the Tokyo market will be open for trading even though it's 10:00 pm EST, on
Sunday night. You could therefore take advantage of trading on the Forex market
late Sunday night from New York.
Overlapping of hours:
In forex market there
is time when two or more markets overlap. For instance, the New York and London
markets overlap from 8:00 am to 12:00 pm EST, while the London and Tokyo
markets overlap from 3:00 am to 4:00 am EST. The Sydney and Tokyo markets also
overlap from 7:00 pm - 2:00 am EST. These overlapping periods are the best time
to trade since volume (liquidity) is at its greatest.
Other good times to trade:
Besides the
overlapping periods, it's best to trade at the following times:
·
During the middle of the week (shows
most movement)
·
During trading hours of the three
largest markets - London, New York, and Tokyo.
Times to avoid:
It's best to avoid
the following times/days:
·
Sundays (limited volume)
·
Fridays (unpredictable)
·
Holidays (limited volume)
·
Release of economic reports (volatility)
·
4:00 pm - 6:00 pm EST (low market
volume).
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