Introduction to foreign exchange trading: a guide to the best and worst trading times
After what is foreign exchange, why you should use it for trading and who constitutes the foreign exchange market, you still lack the necessary knowledge of foreign exchange trading.
The fact that the foreign exchange market is open 24 hours a day doesn't mean it's active all day.
Foreign exchange market time
Before we know the best trading time, we have to see what the 24-hour foreign exchange market looks like.
The foreign exchange market can be divided into four main trading periods: Sydney, Tokyo, London and New York. Here's the opening and closing schedules for each market: you'll find that there's always a period of overlap between each time period. 3:00-4:00 a.m. Eastern time, Tokyo time overlaps with London time, 8:00-12:00 a.m. Eastern time, London time and New York time overlap.
Generally speaking, overlapping trading periods are the most active time of the day, because when both markets are open at the same time, the trading volume on the market is larger. This also makes it more meaningful to trade in this period of time, with more opportunities for trading profits, because all the market participants are trying their best to launch the game in this period of time, which also means that there is more turnover capital in the market during this period.
Now, you are likely to wonder why Sydney's opening time has changed by two hours. You may take it for granted that when the U.S. is adjusted to standard time, the opening time in Sydney will only change by one hour, but please remember that when the US trading time is delayed by one hour, the Sydney trading time is actually one hour ahead, because the season in Australia is opposite to that in the Northern Hemisphere. If you are going to trade at that time, you have to always remember that.
Best trading time:
When two trading periods overlap. In addition, major events in the market, economic data, speeches by the central bank or government officials will also cause fluctuations in the market and cause directional fluctuations in the market. You have to be aware of the major data or events that will be published in the financial calendar during the day.
The European session was the busiest of the three trading sessions.
The middle of the week is usually the busiest period because most currency pairs have the greatest range of volatility during this period.
Worst time to trade:
Friday -- liquidity is scarce on Friday afternoon in New York
Holiday - everyone is resting
Before major events are announced - the market is likely to be contrary to your expectations
When sports programs such as American Idol, NBA Finals and super bowl are broadcast
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