The Rapid Forex e-Course

In his book 'All About The Foreign Exchange Market in the United States' Sam Y. Cross says this about electronic trading, "Quoted prices change as often as 20 times a minute. It has been estimated that the world's most active exchange rates can change up to 18,000 times during a single day. There was a time when this price changed only once in many years. The years became months, then days, then hours and now seconds. These price movements have allowed traders to go in and out of the market at a pace not possible just a few years ago. Active modern day traders can go in and out of the FOREX market 200 times in a single day and take a small profit each time they perform these trades."

So, like a lot of people just being introduced to FOREX, the 64,000 dollar question you're probably asking yourself right now is this:

IF THE MARKET NEVER SLEEPS (remember: the FOREX is basically a continuous 24-hour open electronic-trading session) WHEN SHOULD I BE AWAKE TO TRADE?

Good question.

First a little background for you, then our answer:

- 24 hour market - Sunday 5pm EST through Friday 4pm EST. Rollover at 5pm EST
- Trading begins in New Zealand, followed by Australia, Asia, the Middle East, Europe, and America
- The US & UK account for more than 50% of turnover
- Major markets: London, New York, Tokyo
- Trading activity is heaviest when major markets overlap
- Nearly two-thirds of NY activity occurs in the morning hours
  while European markets are open.


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Select the market, select the time, start trading:
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The foreign exchange "week" begins at 5am Sydney time on Monday mornings. The foreign exchange trading day almost never ceases except for short periods over weekends. At any given time, somebody somewhere is buying and selling currencies. As one market closes, another market opens. Business hours overlap, and the exchange continues as day becomes night and night becomes day.

So, the answer to the above questions is this: The massive liquidity of FOREX, combined with a true 24-hour market that's traded 5.5 days a week, offers you exceptional independence and choices to trade FOREX when you want to, not when the market wants you to. Trades actually develop with relatively the same frequency, regardless of time. As long as the FOREX is open, there is about the same chance that you will find a trade, whenever your look.

However, here's the rub...

During each trading day, overall FOREX *volume* (higher volume = a greater chance of finding more trade opportunities) is determined by what markets are open and the times each of these markets OVRERLAP one another.

With each passing second, minute and hour, FOREX volume remains high, but peaks highest when the Asian market (including Australia & New Zealand), the European market and the U.S. market is open at the same time.

Here's the Breakdown of OPEN Market Times (the times each countries *exchange-traded* markets are open. Important distinction here. Remember: exchange-traded instruments, such as foreign exchange futures, stocks, bonds, etc. adhere to the traditional exchange trading hours):

* New York Market trade times: 8am-4pm EST
* London Market trade times: 2am-12Noon EST - Great Britain Market trade times: 3am-11am EST
* Tokyo Market trade times: 8pm-4am EST - Australia Market trade times: 7pm-3am EST

* = Major Markets

You will notice that there are two times when two of the major markets OVERLAP in trading times; between 2am and 4am EST (Asian/European) and between 8am to 12pm EST (European/N. American).

Generally, the markets tend to make their biggest moves during these overlaps and, therefore, are usually the BEST times to trade.

FUN TRIVIA (Neat to Know Info): Trading FOREX from Africa has advantages because of the time zone. The continent falls neatly between Asia, Europe and the USA. This means that trading time in Africa is the same as that in Europe and also catches both the end of the Asian trading day and the beginning of the U.S. trading day. This natural resource enables African traders to trade at the best times without having sleepless nights :-)