Using the times of the Forex Market is a strategy by itself. The Forex market operates 24 hours a day; therefore you need to know what times are the best to actively trade. These seven strategies will show you how:
1. Understand the different Forex time zones
The major ones in progressive order are Australia, Japan, UK and USA. Through this article they will be referred to as individual Forex markets.
2. Know the opening and closing times of each
Each Forex market has its own opening and closing time. The exact time will change depending on where you currently live in the world. By knowing the open and closing times you can plan when you will trade.
3. Know when the Forex trading week opens and closes
It is important to know when the Forex week opens and closes so that if you have any trades open you can close them at your chosen time. The Forex week opens on Monday on Australia's open and closes on Friday on USA's close.
4. Know which time regions have the greatest volume
Different Forex markets have different amounts of volumes which there affects price movement and therefore volatility and extremely the amount of profit you are able to make. Therefore it is important to trade during high volume time periods. The UK time accounts for nearly 40% of all Forex volume.
5. Know when the trading crossovers occur
Crossover times occur when two different time zones cross over each other therefore there is a massive increase in volume and therefore volatility. During this time you may be able to profit from the volatile movements.
6. Use your own time area you live in
It is important to take into account what time area you can trade based on where you live in the world. Also if you have commitments that you need to attend to you can work your trading around this.
7. Trade your change currency during the corresponding Forex time zones
Say you trade EUR / USD. It is wise to trade this currency primarily during the Europe and USA time zones as this is when the most volume will occur. It is possible to trade during other time zones though low volume may occur and will result in price movement.