Individuals tradeonlinemarket to get into the foreign exchange market must have an understanding of the best times in which to negotiate deals. Besides being closed on the weekends, the forex trading is kind of like shopping at a convenience store: the market’s open 24 hours per day. While this means that you could try forex trading any time, day or night, realistically that will not always work out to your benefit. There are actually peak hours in which different currencies are ideal for FX trading and learning them is crucial to properly executing a successful transaction.
What is the best time for Forex Trading?
The optimal time for a forex broker to execute a currency exchange is when the market is at its most active. At these daily pinnacles, the market has the greatest activity and therefore has the most volume of trades available. These peak trading hours coincide with the overlap of each particular currency’s trading market being open. Although forex trading is open 24 hours per day, each country’s individual market opens and closes in 8 hour cycles.
This means, for example, that the New York market is never open at the same time as the Tokyo market. But there are periods throughout the day when two markets are open simultaneously, which means more active brokers making more trades, allowing for a better probability that a particular trade will find a partner to complete the transaction.
Working within these hours increases the chances of making successful trade. Attempting to make deals outside of these overlap periods is a waste of time. Turn off the computer and try again later.
What This Means
These overlaps mean that trading currencies during these periods are going to yield the best results. As an example, if someone wanted to trade Euros (EUR) for United States dollars (USD), then the best time to accomplish this is from 8:00 am- 12:00 noon EST when London’s and New York’s markets are open.
During these overlapping forex trading sessions, the volume of trades is greatest, increasing the likelihood of a deal being done and a profit being turned.
Different Types of Order
An order is an instruction from the trader to the forex broker to either buy or sell on an exchange. There are different types of orders that can be made. Here are a few common orders: