Best Time To Trade The Currency Market
Loading ...
The greatest volume of currency transactions go through during London time, followed by New York and then Tokyo hours. London time therefore is the centre of the currency …
By far the best time to trade the currency market is when it is the most active and therefore has the biggest volume of trades. A fast currency market means more opportunity for price moves either up or down. A slow market generally means you are wasting your time – turn off your computer and go fishing!
The greatest volume of currency transactions go through during London time, followed by New York and then Tokyo hours. London time therefore is the centre of the currency trading universe.
What does this mean to us the average forex trader and is there a best time to trade our chosen currency pair?
Yes! First of all we must look at overlapping trading times.
The forex market starts with Japanese traders between 8:00 pm to 4:00 am EST. At 3:00 am EST London traders start their day and finish at 11:00 am EST. New York traders open at 8:00 am and finish at 4:00 pm EST.
If we are trading EUR/USD, USD/GPB currency pairs we must look at when the trading time for these pairs overlaps. Therefore, the best time to trade the currency pair: EUR/USD and USD/GPB is between 7:00 am and 11:00 am EST when the two markets for these currencies are most active. (ie. when they are overlapping).
Forex trading is a zero sum game and we as traders must try to do everything possible to get that extra advantage over our competition and swing the odds in our favour. Choosing the best time to trade the currency pair we have selected is one of the things under our control that can easily be done.
Another thing forex day traders should be aware of related to the best time to trade is that Mondays and Fridays are generally poor days to trade. Why is this?
Empirical research suggests that Monday trading is usually tentative as the market is trying to make careful steps to confirm or establish a trend. Fridays are also poor days due to the huge amount of closing trades on that day.
CONCLUSION:
The best time to trade the currency pair of your choice is when trading in that particular currency is most active. The best days to trade the currency market is more likely between Tuesday and Thursday. Good luck with your trading!
Visitors reading this article also enjoyed:
Share article "Best Time To Trade The Currency Market" with your friends:
Post a Comment