Forex Market Hours: A hidden treasure in front of your eyes Even though the forex market virtually trades around the clock, certain forex market hours offer better trading opportunities than others. This is particularly true if your trading approach includes scalping strategies or day trading strategies. Forex Market HoursDifferent forex market hours offer different levels of volatility. The reason for this can be summed up with one word: volatility. Volatility in the market is crucial to your trading success. Ultimately you need price to move to make a profit. So what specific forex market hours offer better trading opportunities than others? Overall, the best trading opportunities are found when the major trading centers open and close for business. Forex market hours mirror human behavior Don’t let me confuse you because earlier I said the forex virtually trades 24/7. While that is correct, the traders working in the major trading centers come to work, leave for lunch and finally go home in the evening. These relatively “predictable” patterns are reflected in the forex market with an increase and decrease in volatility during certain trading hours. While trading outside of those optimal times still goes on, it happens with less liquidity and less volatility. Now, let’s look a bit closer and discuss the three major trading centers, which are Asia, UK and USA. The “trading day” starts in Asia, specifically in Tokyo, Japan, followed by other Asian trading centers. Most of Asia trades between the hours of 7PM and 3AM EST. Asia accounts for the smallest percentage of all forex transactions. Typical volatility during Asia trading hours is low and price often moves in ranges. The next major trading center to open is London, UK. London is the biggest player and offers great volatility for traders. The London market trades between the hours of 3AM and 11AM EST. Most of the major players participate in the London session. Typically you see the biggest price moves during the London forex market hours, representing great trading opportunities. Last, but not least, is New York, USA. The US market comes on board around 8AM EST and trades to approximately 5Pm EST. Even though New York is not the biggest trading center, the New York trading hours still offer great opportunities. For one, we have shifts in volatility when economic news is released in the early trading hours and when the New York stock market opens. Look for market overlap during certain forex market hours! Being aware of these forex market hours alone, let’s you structure your trading so you too can profit from market moves. But there is another, even more powerful, piece of the puzzle: forex market hour overlap! Go back and look at the trading hours of the major trading centers, there is some overlap. This overlap creates another great opportunity for the astute trader. See for yourself if this overlap creates trading opportunities. Commit to study a currency pair to see how it moves during hours of market overlap. The most active market overlap takes place during the early morning New York trading session and the London late afternoon or closing session. This is where you will find the greatest volatility and therefore fantastic trading opportunities. The London Close trade, discussed in other articles, is a great example of that. This highly profitable scalping strategy takes advantage of specific forex market hours and that’s why it has been so profitable and reliable! forexscalpingcourse/
Posted on: Sun, 16 Jun 2013 15:12:40 +0000
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