Forex trading is a lucrative and exciting business. Currency trading is done 24 hours a day – starting Sunday afternoon Eastern Standard Time in the US to Friday afternoon in the same time zone.
Trading is done through 5.5 days during the week as at least one financial center in markets across the world is active and open for business. It is a fact that when some markets are closing for the day, others are opening elsewhere on the planet. Forex trading hours are in overlap mode and currency trading is taking place continuously.
To amateur Forex traders, the market seems to be open 24 hours a day and trading can be done at anytime. This idea needs some clarification. Of course, some hours in the trading market are better than others for opportunities. So, how does one know which are the most favorable timings and why?
The best hours on the Forex markets are times when the largest volumes of currencies are being traded. These hours occur when several countries’ markets are open at the same time. This happens from 8am-4pm in each time zone around the world. These hours are the most active and also have the largest trade volume. Pip movements are also at a high volume and traders have the best chance of making a profit.
Trading opens first in New Zealand, followed by Australian markets. Then Asian markets open – first in Japan, Hong Kong, Shanghai, Korea, Bangkok, Singapore, India, the Middle East, Europe – where Frankfurt, Paris and London are the biggest indices and finally America.
The Forex Trading hours are as follows (EST as per the US Time Zones)
This gives us a good idea that about 5am the markets close in Asia while this is the busiest time in European markets. Australian markets are then opening again in Sydney completing the 24 hour trading day. The markets overlap in different trading zones as per the chart below:
For Forex traders, trading in EUR/USD, USD/GBP or USD/CHF is best done between 8 am – 12pm to get best results as these currencies are active at this time. The largest volume in trading is happening at this time creating significant opportunities for making a profit.
You can see how 24 hour Forex trading can be lucrative – there are some hours which offer better chances than others. Generally, Tuesday and Wednesday trading sessions offer the widest variations in pips in all major currencies and these are the best days for profits and action.