There are a number of fascinating facts that surround the global forex market, but some are undoubtedly more striking than others.
Take the fact that the forex trading market is currently worth a staggering $1.93 quadrillion, which is estimated to be more than 2-and-a-half times larger than the global GDP.
The forex market is also unique in that it’s open 24-hours each day, during which time trades take place across four different sessions. We’ll explore these below, whilst asking if there’s an optimal time to trade currency.
What are the Typical Forex Trading Hours?
The New York Stock Exchange is the second-largest forex platform in the world, whilst it’s open between 8am and 5pm every single day. This is considered to be the most influential trading period, primarily because the U.S. Dollar remains a key component in 90% of all currency trades.
Fluctuations in the value of the Dollar can also trigger seismic price shifts in U.S. stocks and shares during this time, and this provides ample opportunity for investors to pursue short-term profits.
Tokyo is then the first Asian stock market to open at 7pm, with this centre closing nine hours later at 4am.
The dominant currency pairings traded here are GBP/CHF, GBY/JPY and USD/JPY, with the latter an especially good pair to study due to the influence of the Bank of Japan on the market and the status of this pairing as a genuine safe haven.
The Sydney exchange is open from 5pm to 2am, and it’s during this time that the official trading day is thought to begin.
Immediately after this at 3am, the London Stock Exchange opens, and this currently accounts for an estimated 34% of global trading before closing at 12pm GMT.
What are the Best Hours for Forex Trading?
Whilst the global nature of the forex market offers a huge opportunity for investors to benefit from day trading and short-term trends, it also creates issues and restrictions in some instances.
Fortunately, some of these challenges can be negated by using an online trading platform with service providers such as Oanda offering a relevant case in point. After all, this type of platform enables trades to access the market and execute orders within a matter of moments, with the simple click of a few buttons.
By using mobile trading platforms like the MetaTrader 4 (which are usually accessible through the major operators), you can also execute orders whilst on the move and regardless of your geographical location.
In terms of timing your trades, it’s wise to limit your activity to periods where the market is at its busiest. The reason for this is simple; as periods where more than one of the four markets are open simultaneously creates a heightened trading atmosphere, greater leverage and more profitable price movements.
Conversely, trading when only one market is open creates tighter spreads and less opportunity for price movements, so targeting overlaps in specific forex trading times can help to produce optimal results.