If the market is at its most active level, the optimal time to trade in the foreign exchange is when trading spreads (differentiation between bid and demand prices). In these situations, less money goes to market makers who promote currency trading, and they leave more money in their pockets for the purchase and sale of investors.
The Four Major Forex Exchanges
In New York, London, Singapore, and Tokyo the four main exchanges are based. It raises not only the trading volumes but also volatility (as well the degree and level in which stock and currency prices vary), which also helps forex traders when more than one market is open at the same time. That might sound paradoxical. Investors are generally concerned with market volatility, after all. Yet higher volatility is more payout opportunities in the forex game.
Worldwide Forex Markets Hours
The forex has fifteen independent global trading hours that are available daily between Monday and Friday. Nevertheless, from a trading point of view, the four main periods are as follows:
London: 3 AM to 12 PM (noon)
New York: 8 AM to 17 PM
Singapore: 3 PM to 12 AM (Mid Night)
Tokyo: 7 PM to 4 AM
While each exchange operates independently, the currencies are the same. As a result, the number of traders that buy and sell a given currency is increasing dramatically when two exchanges are open. The offers and demands from one foreign exchange instantly have an impact on the quotes and call on all other free trade, minimize market spreads and increase volatility. In the following frames, this is certainly the case:
8 a.m. to 12 p.m. (noon) EST exchanges are available in New York and London
3 pm to 5 pm, open exchanges between New York and Singapore
7:00 p.m. to 12:00 a.m. (midnight) EST with both open Tokyo and Sydney exchanges
3 AM to 4 AM EST, with both Tokyo and London exchanges open
The most favorable trading time is 8 AM to noon when markets are open in New York and London. These two commercial centers account for over 50% of all forex businesses. On the reverse side, between 5 PM and 6 PM EST, the single business process is the Singapore exchange, representing less than 10% of the amount of forex trading per year. There are, however, several exceptions. Political or military crises, which grow over this hour, can increase volatility and volume of trade and make the window a favorable time for a trade.