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The currency trading market is the most liquid market in the world, and also has an extremely short term focus, meaning that investors and brokers can make profits in a reasonably short space of time, depending on their currency trading strategy. The analysis of the currency trading market is commonly broken down into days and hours, but can also be analysed in acute minutes. Because the currency trading time frames are so short, the time of day that you trade should be an integral component of your currency trading strategy. This article outlines how to take advantage of currency trading times, depending on your skill and experience as an online currency trader.
Currency Trading Times and Zones
The ideal currency trading time largely depends on two things, namely your experience and availability, and the overlapping of domestic markets. The currency trading market is open 24 hours a day, excluding weekends, but this doesn?t mean that all hours are equally worth trading. The currency trading market can roughly be broken into three trading zones, namely the Asian trading session (6:00pm EST to 4:00am EST), the London trading session (3:00am EST to 12:00pm EST) and the New York trading session (8:00am to 5:00pm EST). From above it is noticeable that there are times when trading sessions overlap. The Asian and London sessions overlap from 3:00 to 4:00 EST and the London and New York sessions overlap from 8:00 to 12:00pm EST.
Volatility and Currency trading Experience
The more volatility in a currency trading market, the more currency values are significantly moving up or down, meaning that large profits can be made on trades. However, on the flip side of the coin, the more losses can also be suffered. Thus as a top currency trading tips, experienced traders should opt to trade during high volatility periods, whilst inexperienced currency traders should rather test the ropes during lower volatility periods.
High Volatility Currency Trading Periods
The opening of every currency trading session is usually volatile, as news and other market factors that were released after the closing bell of the previous day come into effect. If you are a skilled trader who can recognise patterns, trading immediately after the closing bell may be profitable. The middle of the day is more stable, as currency traders usually wait for further news to be announced. It?s a great place for beginners to start as volatility, as well as potential losses, are low. Just before the closing bell, volatility increases again. If you are available during all hours of the day for currency trading, the London and New York trading session overlap usually has big moves, making it an optimal time to trade.
Citations:
Penny Munroe is an avid writer in currency trading news and tips. Articles include selecting the ideal ecn Forex brokers?to fundamental analysis tips.
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