To maximize your profits, you must know which are the best times to trade forex. This stems from the fact that the forex market is virtually open 24 hours a day (except for weekends).
A quick overview of the trading times is as follows:
Sydney: 22:00 to 07:00
Tokyo: 00:00 to 09:00
London: 08:00 to 17:00
New York: 13:00 to 22:00
Sydney: 17:00 to 02:00
Tokyo: 19:00 to 04:00
London: 03:00 to 12:00
New York: 08:00 to 17:00
A few observations can be made from the above:
- The main markets are Sydney, Tokyo, London and New York, with the Sydney market the first to open at 17:00 EST. The trading day runs for a full 24 hours to 17:00 EST the next day when the New York market closes, but the Sydney market again opens at the same time for its second trading day.
- There are overlapping hours where two markets are open at the same time. These are:
- 19:00 to 02:00 Sydney/Tokyo
- 03:00 to 04:00 Tokyo/London
- 08:00 to 12:00 London/New York
Trading volumes and market activity peaks during the hours when two markets are open simultaneously. Due to this, many traders believe that these are the best times to trade forex, because of the fact that there is higher liquidity, resulting in a trading environment that is most effective. In my experience this is not incorrect, but be careful…
This is Part 1 of 2. Part 2 will discuss the considerations you should take when trading overlapping markets.