Actual Operating Hours
Even though the Forex market is open 24 hours a day, each financial center (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 your New York apartment.
Overlapping Of Hours
With so many financial centers around the globe, you will have times 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 it's 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)
by Harman Gilly
