Forex is a type of market that creates trading opportunities worldwide, but with different needs, trading hours, and currencies, Forex can make you anxious and prompt you to make sudden decisions that you might regret later if you are not entirely familiar with how Forex works. That is why we prepared this brief article on how to trade on Forex, so you can easily learn the basics.
Forex stands for “foreign exchange” and has four types of business hours to accommodate different time zone since it operates worldwide. When you start to understand these times, forex trading becomes easier. Here, we will look at how you can benefit from them without fear of missing out.
Basic Forex Trading Hours Rules
London is the number one currency market globally as it is the focal point of approximately 43% of global trading, and it doesn’t stop there.London also affects currency fluctuations and interest rates. It is widely known that virtually every Forex trend originates from London, and knowing that, helps you quickly analyze potential opportunities using different tools.
There is a tremendous advantage to New York and London overlapping trading times as well. In 2020, the US dollar value fell significantly, but the New York market can still benefit foreign investors. Companies are there to buy and sell, giving even shock value to the market (from time to time).
Tokyo is the main trading center of Asia, where you can most commonly trade currency pairs like USD/JPY. As the third-largest stock exchange globally, it is open from 8 am to 11:30 am and continues after a short break from 12:30 to 4 pm. As with all other stock exchanges, the Tokyo Stock Exchange is closed on Saturdays and Sundays.
Sydney may be the smallest part of the global stock market, but it still plays an important role. There is a short break on Friday afternoon, so the stock market often bursts when it is reopened on Sunday. This is the consequence of various companies trying to regroup, so you can take advantage of that when you are trading.
The Best Forex Trading Hours
Currency trading week begins at 5 pm EST on Sunday and runs until 5 pm on Friday, while it continues for foreign exchange. The market is the most active when the two of them overlap (this is the case with the New York and the London market). Currencies fluctuate a lot more around that time, allowing you to invest or buy to your best possible advantage. This should be the main reason to trade, if you’re thinking of why you should trade Forex in 2020.
As you get to know how the market operates, you will start to notice the patterns that will help you make decisions on where to invest your money. In addition to that, understanding when individual stock exchanges open, what their peak hours are, and how their active time overlaps affect the market, you will become a more successful trader.
Why Trading Money on Forex?
So, why trade money on Forex? The answer is simple but enough. A market that operate! s 24/7? High liquidity? You name it! It gives you multiple opportunities to invest and gain if you know how to play smart, but the first step is figuring out which time suits you best, so you don’t get stressed out about when you should be online or not. See for yourself, and focus on that time of day to observe how everything moves. Analyze the economy as well, and soon enough, you’ll be able to catch the pattern of how everything works. This will make your trading more comfortable, and you won’t be spending your time in vain.