BEST TIMES TO TRADE THE FOREX MARKET

The forex market is the largest financial market in the world, trading around $3.1
trillion each day.
(Every three years, the Bank of nternational !ettlements (B!" surveys ma#or $orex
market %artici%ants and then creates a volume estimate &ased on the information
gathered."
The most recent B! survey com%leted in '(() yielded the estimated volume figure
as $3.1 trillion. (This figure re%resents an increase in volume of a&out )(* from the
'((+ survey."
The market is o%en '+ hours a day from ,%m E!T on !unday until +%m E!T $riday.
This makes the s%ot $- market uni.ue to any other market in the world, as trading is
availa&le '+/hours a day.
Trading Zones
!omewhere around the world, a financial center is o%en for &usiness, where &anks
and other institutions exchange currencies, every hour of the day and night with
generally only minor ga%s on the weekend. Essentially foreign exchange markets
follow the sun around the world, giving traders the flexi&ility of determining their
trading day.
The forex market can &e s%lit into three main regions0 1ustralasia, Euro%e and 2orth
1merica.
3ithin each of these main areas there are several ma#or financial centers. $or
exam%le, Euro%e is com%rised of ma#or centers like 4ondon, 5aris, $rankfurt and
6urich.
Each day of forex trading starts with the o%ening of the 1ustralasia area, followed &y
Euro%e and then 2orth 1merican. 1s one region7s markets close another o%ens, or
has already o%ened, and continues to trade in the forex market.
Forex volatility
!ince $orex is a highly dynamic market, with lots of %rice oscillations in a single
minute, it allows traders to enter the market many times a day and %ull some %rofit
from these num&ers of trades.
But this '+ hour market does not necessarily mean continuous volatility in the
currencies. 8ost new traders often misinter%ret the fact, that this market can &e
traded anytime during the working hours of the week.
3hile there is always a definite movement, traders ideally need an environment of
volatility, which may not &e %resent at all the given times.
If you want to find an appreciable number of profitable trades you need to
enter the forex market at the best period of time, i.e., when the activity, the
volume of transactions, is the highest.
Characteristics of the Forex market

$orex is a '+ hour market. t starts from !unday ,%m E!T through $riday
+%m E!T.
$orex trading &egins in 2ew 6ealand, followed &y 1ustralia, 1sia, the 8iddle
East, Euro%e, and 1merica.
The 9! : 9; account for more than ,(* of the market transactions.
2early two/thirds of 2< activity occurs in the morning hours while Euro%ean
markets are o%en.
=uring each trading day, the total forex volume is determined &y the num&er
of markets that are o%en and the times each of these markets overla% one
another.
Timings of the maor market !ones
2ew <ork 8arket trade times0 >am/+%m E!T
Euro%e 8arket trade times0 'am/1'2oon E!T
Tokyo 8arket trade times0 >%m/+am E!T
"verlap of trading !ones
Forex trading activity is heaviest when maor markets overlap.
Currencies tend to be most active when the markets overlap.
#$%&urope "verlap'
( )* + ,- .* /0ew 1ork Time2
&urope%)sian "verlap'
- )* + 3 )* /0ew 1ork Time2
Chart of the overlap !ones
*aor market !ones
$orex 8a#or 8arket ?ones / 1sia, Euro%e and 9!1. (Tokyo, 4ondon and 2ew <ork"
3ithin each of these main areas there are several ma#or financial centers.
$or exam%le, 1sia is com%rised of ma#or centers like 1ustralia, Tokyo, @ong ;ong,
!inga%ore etc.
4et us further look at the 8a#or markets in detail A
)sian Zone. (Tokyo Trading !ession / >0(( 58 to +0(( 18 (E!T" "
Tokyo is the first ma#or market to o%en, and many large %artici%ants often use
the trade momentum there as the &enchmark to gauge market dynamics as
well as to devise their trading strategies.
Trading in Tokyo can &e thin from time to timeB large investment &anks and
hedge funds are known to use the 1sian !ession to run im%ortant sto% and
o%tion &arrier levels.
n this session, 9!=CD5<, 19=C9!=, 26=C9!= and their crosses %rovide good
o%%ortunities as li.uidity and momentum remains su%%orted from the
%revious 9! session into the relatively lighter 1sian session.
But the ma#or activity and su&se.uent li.uidity is mostly concentrated in the
British 5ound &ased currency %airs A like the EB5CD5< and the EB5CF@$. There
is usually a lot of o%%ortunity in trading these %airs after the >58 E!T o%en.
The 9!=D5<, EB5F@$ and EB5D5< are good %airs to trade, as their &road
ranges %rovide short/term traders with lucrative %rofit %otentials, averaging
a%%. G( %i%s.
The EB59!= and 9!=F@$ are also good choices due to their moderate
volatility as they hel% shield traders from irregular market movements due to
intra/day s%eculative trades.
But the Euro &ased %airs (E9HF@$, E9HEB5 and E9H9!=" should &e avoided
until the 4ondon session when Euro%ean traders antici%ate the o%en.
&urope Zone (4ondon Trading !ession '0(( 18 to 1'0(( 58 (E!T""
4ondon is the largest and most im%ortant dealing center in the world, with a
market share of at least 3(* and trading volume around $,>( &illion.
8ost of the dealing desks of large &anks are located in 4ondon.
The ma#ority of ma#or $- transactions are com%leted during 4ondon hours due
to the market7s high li.uidity and efficiency.
The vast num&er of market %artici%ants and their high transaction value
makes 4ondon the most volatile $- market among all.
Traditionally a more volatile market, the 4ondon session is a good o%%ortunity
to transact in various EB5 and E9H &ased currency %airs.
Furrency %airs like EB5F@$, EB5D5< and EB59!= %resent favora&le trading
o%%ortunities.
The 9!=F@$, 9!=F1=, and E9H9!= %airs also exhi&it much activity.
But the volume of the D5< &ased %airs decline shortly after the overla% %eriod
ends, and should not &e considered for momentum trades.
#$) Zone. (2ew <ork Trading !ession >0(( 18 to ,0(( 58 (E!T" "
2ew <ork is the second most im%ortant market in $-, with a%%roximately 1I
* of market volume.
2ew <ork trading is very li.uid.
n the 9nited !tates s%ot market, the ma#ority of deals are executed &etween
>18 and 1'0((58, when Euro%ean traders are still active.
Trading often &ecomes .uite cho%%y after midday however, as li.uidity dries
u%. 1s a result, traders tend to %ay less attention to market develo%ment in
the afternoon.
2< is very much influenced &y the 9! e.uity and &ond markets and %airs will
often move closely in tandem with the ca%ital markets.
Jffering the most %ossi&ilities, the 2ew <ork session %rovides activity and
li.uidity in 9!=F@$, EB59!=, 9!=F1= and E9H9!= and su&se.uently most
dollar &ased %airs.
1dditionally EB5F@$ and EB5D5< momentum s%ills over from the %revious
session and com%rises a good %ercentage in 2ew <ork.
But the E9HEB5 and E9HF@$ should &e avoided as li.uidity dissi%ates during
the overla% and does not rekindle until the following 4ondon o%en. The thin
market thus causes fluctuations that are unfavora&le for the %rofit seeker.
4now your Currencies
1 trader will have a definite edge, if heCshe is aware of /
The 1verage 5i% range during certain times.
The 1verage =aily Hange of the currencies.
The am%litude of the currencyKs movements s%anning a daily '+ hour day (across the
3 ma#or trading ?ones".
The day and time that the currency is ex%ected to have high volatility.
The daily volume figures of the different currencies.
5reakup of the average range in pips
)mplitude .robability 6istribution.
n addition, a trader should &e aware of the am%litude of the currencyKs movements
s%anning a daily '+ hour day (across the 3 ma#or markets"
$or exam%le the data for E9HC9!= and the 9!=CF@$ is given &elow
&#7%#$6 )mplitude .robability 6istribution.
=aily )G.'3* chance of 1((/1,( %i% move
3 =ays )>.(1* chance of 1((/',( %i% move
, =ayC 3eek >1.G)* chance of 1((/3(( %i% move
#$6%C8F )mplitude .robability 6istribution.
=aily )+.'3* chance of ),/'', %oint move
3 =ays )+.,I* chance of 1,(/3), %oint move
, =ayC 3eek +,.+3* chance of '',/3), %oint move
)ctive days and times
9bp%#sd
31* of the trends occur on Thursday
3G* of the trends occur &etween (,((/(G(( E!T
&ur%#sd
I+* of the trends occur on Thursday : $riday
3,* of the trends occur &etween (,((/13(( E!T
#sd%Chf
+,* of the trends occur on Thursday : $riday
I1* of the trends occur &etween (,((/13(( E!T
#sd%:py
+1* of the trends occur on 3ednesday : Thursday
,1* of the trends occur &etween (,((/13(( E!T
9bp%:py
+G* of the trends occur on 3ednesday : Thursday
31* of the trends occur &etween (1((/13(( E!T
)verage 6aily 7ange
E9HC9!= 111 %i%s 19=C9!= >, %i%s
EB5C9!= 1,I %i%s 26=C9!= >1 %i%s
9!=CF@$ 1') %i%s EB5CD5< 1)' %i%s
9!=CD5< 1(' %i%s EB5CF@$ 1I1 %i%s
Conclusion.
$orex market volume of transactions remains high during the whole day, &ut
%eaks highest when the 1sian market (including 1ustralia : 2ew 6ealand",
the Euro%ean market and the 9.!. market are o%en simultaneously.
n %articular, there are two times when two of the ma#or markets overla%
during trading hours / &etween 'am and +am E!T (1sianCEuro%ean" and
&etween >am to 1'%m E!T (Euro%eanC2. 1merican".
If you want to find a great number of profitable trades, focus on the
hours when the markets tend to make their biggest moves, i.e.,
during these big markets overlaps, which therefore, are usually the
5est Times to Trade.
$unil *angwani
www.fibforex,-;.com