So what are the best currency trading times? The foreign exchange market is open day and night throughout the business week, but this does not necessarily mean that all of those 24 hours are beneficial for trading. There is a lot more action on the foreign exchange markets at specific periods of the day and frequently the appropriate times to trade are when the exchanges are busiest.
The two major trading floors for currency trading are London and the US markets. Despite the fact that the UK does not use the euro, most eurozone lands are within one hour time deviation from the UK, as is Switzerland. US time zones also include Canada. So the London session and the US session in between of them cover most of the important currencies that are traded.
The London trading starts at 8 a.m. UTC and ends at 16.00 UTC. The forex crosses that are most active during this session are the Euro, British Pound and US Dollar which is takes part in the majority of all transactions.
The North American trading gets started at 13.00 UTC (8.00 EST) and finishes at 10 p.m. UTC (17.00 EST). The most traded currencies during these times involve the US Dollar, EUR, British Pound, Australian Dollar, the Japanese Yen and the Canadian Dollar.
The peak exchanging time, as you might expect, is in the three hours when both of these trading times overlap and the exchanges are active in both London and New York. This time overlap runs from 13.00 to 16.00 UTC (8 a.m. to 11.00 EST).
If you like to leave your orders open for several days it would not make that much difference to you knowing the busiest periods on the markets. But if you are involved in currency day trading where you might open and close a trade within a very short period, you will find most trading opportunities popping up within the most active hours.
If you are trading a cross rate, i.e. a currency pair that does not include the US dollar, you might have another time window when the financial markets in both countries are open for trading.
For example if you were trading AUD/JPY you could find that trading was good during what is called the Asian session. The Australian and Japanese trading hours are pretty close and on a day when activity was foreseen you may find some winning trades within the overlap. However, generally this is a not so active session for just about all currencies.
Thus the best time for most currency traders is within that 3 hour window in the morning in the United States and the afternoon in the UK and Europe, when the exchanges are open on both sides of the Atlantic. Trading can be frantic during those hours, there is maximum volatility and the currencies move far and fast. Most the significant economic news is broadcasted during this period too, especially toward the beginning. So these hours are the most beneficial forex trading times if you want to grab quick profits.
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