Timing is very important in Online Trading Platform. Whether you go long or go short, you have to consider the time. For beginners, timing cannot be perfected easily. Now, let’s ask the question: when are the best forex trading hours?
Simply put, the best trading hours on forex are when the market is most active. Why? When most traders are active, trading spreads tend to narrow. But wait, what are spreads? Spreads are the difference between the bid price and the ask price.
Now, what does it mean when spreads become tighter? It means that less of your money goes to the market maker, or the specialist who trades the currency in question. It also means that more of your money goes to you.
Major Forex Exchanges
No matter what market you are trading in, active trading markets will almost always be better for you. This applies to the Forex Online Review market, the NYSE, or any other financial trading market.
For forex traders, trading when the market is totally active gives them another edge—volatility. The four major exchanges of the forex market are New York, London, Singapore, and Tokyo, and because of these exchanges’ nature, when more than one exchange is open, your trading volume increases and so does volatility.
Many investors fear market volatility. What’s volatility? It is the extent and rate at which a extremely volatile currencies, but it’s actually good for traders.
Without volatility, the price will remain the same. This means that your trade cannot be profitable. True, volatility brings with it some risks, but it also gives you plenty of opportunities.
Global Market Hours
When you’re trading currencies, you got yourself fifteen independent exchanges around the globe. All of them are open five days a week, from Monday to Friday. Each of these exchanges has their own trading hours.
As a trader, the four most important exchanges and their hours are London, 3 AM to 12 PM (noon), New York, 8 AM to 5 PM, Singapore, 3 PM to 12 AM (Midnight), and Tokyo, 7 PM to 4 AM. All of these times are Eastern Standard Time.
Those time overlaps mentioned above are the best times to trade. The most favorable trading time would be the 8 AM overlap to noon during which both New York and London exchanges are up and about. These two account for more than half of all trades on all 15 exchanges worldwide.
However, keep in mind that special situations can take the spotlight and make any hour a good time to trade. For instance, from 5 PM to 6 PM EST is not really a good time to trade. During this time, the only open exchange is the Singapore exchange. And that exchange accounts for less than 10 percent of annual forex trading volume.
But if there was a political or military crisis anywhere in the world that took place during this hour, you can find that volatility and trading volume would perk up, making it a very nice time to trade.