When Should You Trade In Foreign Money Exchange?

In the 24 hour foreign exchange market, timing is critical. It is very much essential to know when should you trade in foreign money exchange. Timing is one thing that would actually determine your success in the forex market. You need to carefully choose the timing of your trades to produce profits from your forex investments. You need to find the best time to trade in foreign exchange market, the best time with regards to activity, volume of trade etc.

There are some important features of foreign exchange market and until and unless these are understood you cannot find out the best time to trade the forex market. Foreign exchange market opens for trading Sunday night (5 PM EST) and closes for business again on Friday afternoon (4 PM EST). Trading begins from New Zealand and then is followed by Australia, Asia, the Middle East, Europe and America. The most prominent forex market is undoubtedly the US and the UK. They account for more than half of the total market transactions. Read the article further to know when you should trade in forex.

If it comes to major forex markets, London, New York and Tokyo would win hands down. Around 75% of market activities in the New York markets are witnessed in the morning hours while the European markets are still open. However, foreign currency exchange hours are different for different countries. The Asian currency trading session starts at 7 PM EST (12 AM GMT) and closes at 4 AM EST (9 PM GMT). During this session the most frequently traded currencies include GBP/JPY, GBP/CHF and USD/JPY.

The US forex hours begins at 8 AM EST and ends at 5PM EST. The currency pairs traded during this session includes GBP/USD, GBP/JPY and USD/JPY. There are also trading in USD/EUR and USD/CAD. However, London is the largest and most essential trading center in the world at a market share higher than 30%. Foreign currency exchange hours for London start at 2 AM and ends at 12 PM EST. All major currency pairs are traded during this session. Moreover, the absolute majority of all currency trades in the market are carried out during these forex trading times because of the liquidity and quick efficiency of the market.

When you try to determine the best time to trade the foreign exchange market, the above information on when to trade in foreign exchange market will be very useful. And if you want to know when the forex trading is the heaviest, you should look for the time when the major markets overlap. Moreover, keeping in mind the forex volume is extremely essential.