The forex trading market has a lot in common with the stock market; they both involve speculators who attempt to use real world data in order predict market trends, they both can be very profitable for wise investors, and they both require a combination of skill and luck. But the differences are also quite stark. For one, the stock market deals with about $300 million in exchanges per day, while the forex market blows that out of the water with a whopping $2- $3 billion in daily exchanges. Those numbers, while both quite staggering, are also substantially different in value.
Another critical difference between the two is their hours of operation. While the stock market is only open limited hours each day,
forex trading is available 24 hours per day during the work week. But just because it is always open does not mean trades can be made at any time. There are peak hours when specific currency pairs can be traded and if you are not operating during these hours then you may as well be sleeping or watching TV. To best understand these ideal hours, here is a guide that aims to explain when currency markets overlap in order to create opportune trading times when the market is most active. The majority of trades occur during these periods, so working within them wills make it more likely that a particular trade will catch, or be accepted by another party.
Forex Trading Hours (in Eastern Standard Time)
New York: 8 AM to 5 PM EST
Tokyo: 7 PM to 4 AM EST
Sydney: 5 PM to 2 AM EST
London: 3 AM to 12 PM EST
The best time to catch a trade is when the markets overlap, yielding more traders operating simultaneously. Here are the times of overlap:
Market Overlapping Hours (in Eastern Standard Time)
New York / London: 8 AM to 12 PM EST
Sydney / Tokyo: 7 PM to 2 AM EST
London / Tokyo 3 AM to 4 AM EST
In order to increase the chances of a trade being accepted, it is best to work during the periods of overlap. For example, trading EUR/USD or GBP/USD would be most successful from 8 AM to 12 PM EST when the London market and New York markets are both open.
Understanding peak hours will help you in your pursuit of better trades and achieving more profitable trades from your
forex broker.
