A detail that can cause some confusion regarding Forex is the timetables for financial markets. It is always open but it follows some very particular rules. For example, even if it’s open 24 hours a day, the first market to open is New Zealand, while the last market to close is New York. Apart from these details, it is very important to take the following into account:
- The opening and closing hours of the markets in the main financial centres
- The overlap that is created between the markets
- The difference in time in cases of application of daylight saving time
- The local time of your broker who provides the platform (this is one of the best)
The last point should be clarified right from the start so that you can plan according to this time, and when calculating closing and opening price formations.
In addition to these, we recommend you take the following into account (depending on the currencies you invest in): the dates of national holidays during which the markets are expected to close. This may appear secondary, but if you think about American holidays, they have effects on all the other international markets, even if nothing happens. Many times Forex prices move with reference to the predictions of the opening/reopening of the American markets.
Why are timetables of financial markets important?
We have listed some elements to take into consideration, but we have not highlighted them all. Among the most important reasons for knowing opening hours of Forex markets are the following:
- To open or close a certain transaction, you need a counterpart, which is why more operators are active at this time and there are more possibilities to operate. By operate we mean the carrying out of purchase and sale operations, so for those who want to sell it will be easier to find buyers.
- Opening and closing times are very important because at these times, the markets are particularly active. These periods are often referred to as “hectic”.
- Some macroeconomic data is often (but not always!) communicated at certain times of the day, as a matter of custom. These may or may not affect the performance of currencies.
The best hours to trade Forex
There are many operators who swear by these trading hours:
- From 7 to 9 on the London and Tokyo markets
- From 10 to 12:30 on London market but not for EUR/USD
- From 2.30pm to 7pm on the London and New York markets
- From 1pm onward in New York
- From 02:30 to 04:30 (at night) on the Tokyo market
Usually the best days to trade are midweek, especially Tuesday, Wednesday and Thursday. This will allow you to operate net of the jolts deriving from the results of the previous week (for example linked to the stock market) and the forecasts for the following week. In any case, always take into account news deriving from macroeconomic situations of the countries and communities of the countries subject to the currency pair being traded.
Go to the next lesson – The Value of Pips