The best forex trading hours time to trade the forex is when it’s at its most active levels. It is when trading spreads (the differences between bid prices and the ask prices) tend to narrow.
In these situations, less money goes to the market makers facilitating currency trade. Hence, there is a tendency to leave more money for the traders to pocket personally.
The 4 Major Forex Exchanges
The four major forex exchanges are located in London, New York, Sydney, and Tokyo. Forex traders need to commit their hours to memory, with particular attention paid to the hours when two exchanges overlap.
When one exchange is simultaneously open, it doesn’t only increase trading volume, but also the volatility. From these factors, it can benefit forex traders. Investors generally fear market volatility. In the forex game, however, greater volatility translates to greater payoff opportunities.
Worldwide Forex Markets Hours
There are 15 independent worldwide exchanges that open weekly from Monday through Friday. Each exchange has unique trading hours. The four most important times are London (3.00 a.m. to 12 p.m (at noon)), New York (8 a.m. to 5 p.m.), Sydney (5 p.m. to 2.a.m (at midnight)), and Tokyo (7 p.m. to 4 a.m.).
The most favorable trading time is the 8 a.m. to noon overlap of New York and London exchanges. These two trading centers account for more than 50% of all forex traders. On the flipside, from 5 p.m. to 6 p.m., trading mostly happens in the Singapore and Sydney exchanges, where there is far less volume than during the London/New York window.
On the other hand, you also need to highlight what time that possibly slow trading hour. It could potentially spike volatility and trading volume, making it a favorable time to trade.
High-Volume Forex Trading Hours to the Profits
Forex traders should proceed with caution because currency trades often involve high leverage rates of 1000 to 1. While this ratio offers tantalizing profit opportunities, it comes with an investor’s risk of losing an entire investment in a single trade.
According to a 2014 Citibank Study, it found that only 30% of retail forex traders break even or better. 84% of those polled showed that they can make money in the forex market.
New forex investors should open accounts with firms that offer demo platforms, which let them make mock forex trades and tally imaginary gains and losses.
Once investors learn the ropes and become seasoned enough, then they can confidently begin making real trades.